Is There an Overlapping Market between National Car Producers in Malaysia?

Hayder Abbas Drebee (), Nor Azam Abdul Razak () and Mohd Karim
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Hayder Abbas Drebee: College of Administration and Economics Al-Qadisiyyah University, Al-Diwaniyah, Iraq
Nor Azam Abdul Razak: School of Economics, Finance and Banking Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, MALAYSIA

Jurnal Ekonomi Malaysia, 2014, vol. 48, issue 1, 75-85

Abstract: This paper examines how the choice of three broad categories of automobiles in Malaysia (i.e. Proton, Perodua, and foreign automobiles) is affected by a change in the price of a specific car model. Using a sample of 478 automobile owners in Malaysia, a discrete choice analysis is conducted based on the conditional logit model. In general, it is found that the own-price effect on Proton (Perodua) cars is negatively related to a specific Proton (Perodua) model; in contrast, the cross-price effect on Proton (Perodua) cars is positively related to a specific Perodua (Proton) model. Of the nine models evaluated, three of them show a significant overlapping market segment. This finding implies that Proton and Perodua should differentiate these products further to lessen competition between them.

Keywords: Automobile choice; Perodua; Proton; conditional logit model; overlapping market (search for similar items in EconPapers)
JEL-codes: C25 D12 (search for similar items in EconPapers)
Date: 2014
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