Macroenvironment

According to a story published by The Malaysian Reserve in January, the

government has decided to lift its tax exemptions for fully imported hybrid and

electric cars. (Gilbert and Kumar, 2014) This is a political macroenvironment factor

that is affecting the hybrid cars industry in Malaysia. The article further states

“International Trade and Industry Minister Mustapa Mohamed said that the Treasury

Department found that tax-exempted fully imported hybrid and electric vehicles had

not provided the spark to create their assembly in Malaysia.” Additionally, he

mentioned that their tax-exemption for the hybrid cars was to encourage production

and local assembly since these were CBU assembled cars but after four years, it failed

to attract investments for Malaysian assembly of the cars.

Microenvironment

One microenvironment factor that is affecting the hybrid cars industry in

Malaysia is costumers that are mainly linked to one of the McCarthy’s four Ps which

is the pricing of hybrid cars as opposed to normal cars. This force is close to hybrid

car companies that affect its ability to serve its customers. One problem that

customers run into is the higher initial cost of a hybrid car since they tend to be

generally more expensive than a normal gasoline-fuelled car due to tax of imported

cars. For example, Honda Civic costs about RM 115,000 and Civic Hybrid costs RM

120,000. (Honda.com.my, 2014) Hybrid cars are supposed to help with fuel savings

and its annual operating costs; nevertheless it takes about four to eight years

depending on the car before the cost of owning it will be cheaper than a normal car as

seen in the illustration below. (Mcintire-Strasburg, 2013)

(Mcintire-Strasburg, 2013)

Recommendation

The Nissan Serena S-Hybrid costs around RM 140,000 and is assembled in

Japan. This is expensive for some customers who may not be able to afford it.

Furthermore, this recent government tax law for CBU hybrid cars is a business

legislation to protect the local auto industry and to enforce foreign cars to be CKD

meaning they would be assembled in Malaysia which raises its local employment

rates and automobile exports to the ASEAN region. A recommendation to Nissan

would be to do the same as its competitors such as Honda that recently launched a

completely-knocked down (CKD) Honda Jazz manufacturing plant in Malacca to

avoid the import taxes which would lower the initial cost significantly. (Gilbert and

Kumar, 2014) Honda Jazz Hybrid is priced at about RM 90,000 which is

exceptionally affordable for a hybrid 5 seated SUV. If Nissan were to have CKD

hybrid cars, consumers such as the middle-class would be satisfied and more likely to

afford an environmentally clean car that will help them with fuel-saving from the

start. At the moment, Honda is the first to produce hybrids in Malaysia and this new

advanced green technology is a great opportunity for Nissan to exploit. Nissan needs a

manufacturing plant for Hybrid cars in Malaysia to be able to compete in the local

hybrid car industry against competitors like Honda.

WORD COUNT: 499