Research Proposal: Competition for Car manufacturers in Malaysia with respect to WTO Liberalization Policy

Abstract

This research proposal aims at undertaking the effects of WTO liberalization on the degree of competition in the Malaysian automotive industry. Moreover, it also intends to investigate if market liberalization results in supporting a few giant companies to monopolize the global automotive industry. In this regard, various related aspects are taken into account, which primarily include assessing the pre and post globalization era of developing economies like Malaysia, the current automobile market trend, future forecast, and the discrepancy in Malaysian automotive industrial policies. The proposal also discusses the relevant literature, proposed methodology, and possible limitations which this research may entail.

Table of Contents

Introduction1

Problem Statement1

Thesis Statement2

Aims and Objectives3

Hypotheses3

Research Questions4

Literature Review4

The Debate of Industry Protection In Developing Economies5

Globalizing of Developing Economies: Malaysia5

Assessing Malaysian Industrial Policy in a Globalizing Economy6

Automobile Industry of Malaysia7

Trade Performance7

Competing With International Markets8

Market Forecast8

Analysis of Malaysian Automotive Policy8

Methodology9

Possible Outcome10

Limitations of the Study11

References12

Research Proposal: Competition for Car manufacturers in Malaysia with respect to WTO Liberalization Policy

Introduction

Over the last couple of decades Asia Pacific Economic Cooperation (APEC) has been actively involved in liberalization of trade and investment in Asian Pacific region. Although, APEC has been voluntarily involved in market liberalization; however, international organizations like World Trade Organization (WTO) and Association of South-East Asian Nations (ASEAN) exert external pressure on domestic economies to facilitate trade liberalization. In this regard, different countries have devised various policies to liberalize as well as protect their domestic markets in different industries. However, automotive industry is one sector which has had the highest degree of attention in respect of liberalization. The rationale behind governments providing much higher attention to automotive industry in the wake of liberalization of market lies in the fact that it provides the most significant contribution to GNP, technological advancements, provision of employment, and in attracting the highest percentage of investment at national and international level.

Problem Statement

In the past, many countries which preferred importing completely built-up (CBU), i.e. cars ready to get on road, switched to import substitution. In this arrangement, a country got into an agreement or a joint venture with a foreign company to import car parts, which then got assembled in the importing country. This setting enabled domestic markets to remain protected from imported items which generally wiped out their market. Although during the last four to five decades, import substitution, particularly in developing and under-developing countries have provided substantial protection to smaller domestic companies; however, it has been highly criticized at global level. Consequently, 21st century which is characterized by globalization, has led to making markets more liberal so that trade can flow from one nation to another without import barriers. The liberalization at global level is encouraging heavy investment sectors like automobile industry to get integrated into the global network; however, smaller domestic companies in developing countries like Malaysia, India etc are not ready to compete in the global forum.

Domestic players in Malaysian automotive industry strongly condemn market liberalization attempts by the government because they are ...