The application of the international trading and investment theories on international automobile business: Lesson from 2 case studies; Proton and Toyota

Mohammad Rahimee, Ibrahim (2010) The application of the international trading and investment theories on international automobile business: Lesson from 2 case studies; Proton and Toyota. Masters thesis, Asia e University.

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Abstract

In the 21st century, there are many domestic companies who have strived try to enter the foreign market. All the existing multinational company would face challenges from this development. Some of the challenges that theses multinational companies would face includes technology and financial. Several theories includes mercantilism theory that was used widely in 17th century, absolute advantage theory that explain how free trade will affect the trade flow, comparative advantage theory, Heckscher-Ohlin theory, product life theory and other international investment theories have been used to study and understand international investment. Thus, this paper will look into those theories as compared to the roles of technology and financial in the international automobile business. Automobile industry (Proton Holdings Bhd and Toyota Motor Company Ltd.) will be the focus of this study. These two companies will be examined on their trade and investment theories as compared to their worldwide performance based on technology as well as their financial strength. In summary, Proton has been very successful in domestic market with strong support and privileges given by the Malaysian government. The international component in Proton still remain uncertain, as they were not able to compete with those players in the international ground. Toyota on the other hand, has achieved the highest standard in performing the organization’s objective in becoming the market leader in automobile industry. However, they are having stiff competition with their rivals in the market and the biggest challenge posed for Toyota would be to maintain their product quality. The next toughest challenge would be to keep their consumer’s confidence level at the very highest level to ensure continuity in their future sales.

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