Honda Motor Co. entering Malaysia. Business & Marketing Essay

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Honda Motor Co. Entering Malaysia
The automotive industry in Malaysia is a significant part of the country’s manufacturing sector. Malaysia has implemented various favorable policies that have led to an automotive industry that is resilient and competitive. For this reason, Honda’s penetration into the country’s market can be successful and beneficial. Malaysia has a high GDP as compared to other Asian countries; it is considered an upper middle-income country, which is evidenced by the $296.7 billion GDP recorded in 2015 (World Bank). For over 25 years, the economy of Malaysia has witnessed an average growth of 7 percent per annum (World Bank). Despite the economic crisis of 2009 that impacted the global economy, the country was able to quickly recover and judging by the rate of growth, Malaysia is on the verge of eradicating poverty. According to a survey by the World Bank, out of the 189 global economies to conduct business in, Malaysia was ranked 23 (World Bank). The capital-intensive, knowledge-based, high technology economy has spurred its transformation into a multi-sector economy. More so, the country is EU’s highly distinguished trading partner in the Association of Southeast Asian Nations (ASEAN). Honda can also benefit from Malaysia’s obligations under the ASEAN tariff scheme, which dictates a reduced import tariff on imported cars and components from ASEAN countries (Nehru). This would mean that since the costs of importing the cars would be low, then the price of the cars can also be at a competitive level. More so, the government of Malaysia has also imposed high tariffs on cars from non-ASEAN countries as a means of protecting domestic manufacturers. Since Japan is a member of ASEAN, then Honda has many advantages over other companies from non-ASEAN states. Politically, the Malaysian government has promoted heavy industrialization as a means of boosting economic growth (Tai 39). However, Honda might face challenges in competing against Proton, which is a Malaysia’s car manufacturing company that was established to boost the domestic manufacturing of vehicles in the cou...