Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :LDS0021A

Year : 2006

Industry :Automobiles

Region : Malaysia

Teaching Note:Not Available

Structured Assignment :Not Available

Abstract: In 1983, Perusahaan Otomobil Nasional Sdn. Bhd. (Proton) was founded to symbolise country’s rapid industrialisation and aspirations to first-world status, by prime minister Mahathir Mohamad. Since its inception, Proton grew consistently from a mere assembler to an integrated car company and became a national icon of Malaysia. Even with the iconic status, cheap prices and imposition of heavy tariffs on rivals Proton’s domestic market share which once peaked at 74% in 1993, declined to 35% in 2005.

According to ASEAN Free Trade Agreement (AFTA) introduced in 1992, ASEAN members agreed to eliminate intra-regional tariffs and non-tariff barriers. Malaysian automobile industry protected by its government was expected to face troubles in future as the AFTA facilitated foreign players to establish their base in Malaysia. On the contrary Perodua (the second national car of Malaysia) performed well and went ahead Proton for the first time in the history.

In order to combat the economic challenges and competitive pressures from Proton, Syed Zainal (former Executive Director at Perodua) was appointed as CEO of Proton. Would Syed Zainal be able to steer Proton back on to the success path?