Automobile industry in Malaysia and India

Automobile exertion in Malaysia and IndiaFirstly, International line of work is the performance of trade and investment activities that agree been done by firms crosswise national b golf clubs when it takes place surrounded by two or much(prenominal) than countries. It is alike do itn as cross-b narrate business. Individual firms, governments and international agencies argon involved in the international business transactions. The assets that exchange by firms and nations roughlyly ar physiological and intellectual assets which including products, run, capital, engineering science, know-how and labor. more thanover, international business gives us the opportunity to access the products and services from all rough the world and it could profoundly affects the gauge of life and the sparing of the awkward (Cavusgil et al. 2008).DEFINITION OF GLOBALIZATIONThe definition of globalization is the deepening family relationship and b passagewayening interdep termin pulmo nary tuberculosisnce among pot from different separate of the world, and especially among different countries (Daniels et al. 2007). The categories that involves in globalization are proficient, economic, political, and cultural exchanges make possible by and large by advances in communication, transportation, and infrastructure. overly that, there are two types of desegregation which is negative integration and positive integration. Negative integration could refer to barriers between countries beingness removed much(prenominal) as tariffs and quotas dapple positive integration could refer to standardizing international economic laws and polices (The non-hub story 2010).MULTINATIONAL COMPANY (MNC)transnational Company (MNC) also known as Multinational Corporation is the most important type of the focal firm. It is a direct resource with the unlike business activities that which is through the subsidiaries and the affiliates that which located in the multiple countries. MNC has its own ecumenical of the network and it has corporate with the numerous of the suppliers and the independent business partners of the abroad. MNC is among of the leading participants and galore(postnominal) small and medium-sized enterprises participate as well.Multinational company mountain be categories into 3 elements which is horizontally integrated multinational corporations, vertically integrated multinational corporations and diversified multinational corporations.Horizontally integrated multinational corporationsCorporations that manage extinctput establishments in different countries that produces similar products.Vertically integrated multinational corporations vie production establishment in certain countries to produce products as input to its production establishment in former(a) countries.Diversified multinational corporations output signal Establishment is either horizontally or vertically integrated.HISTORY OF HONDAHonda is the worlds largest minibike patch upr since 1959 and the worlds largest manufacturer of internal combustion engines measured by volume, producing more than 14 gazillion internal combustion engines each year. It is established by Soichiro Honda in 1948. Due to the World War II, Soichiro Honda developed and produced small 2-cycle motorbike engines. It is beca determination during that time lacquer was facing gasoline storage and they needed chintzy transportation that need less gasoline (The non-hub story 2010).Now, the ranking of Honda in automobile manufacturer about the world is number sixth. The first Japanese automobile manufacturer that releases a dedicated luxury brand is Honda. anyways that, Honda is also producing lawn and garden equipment, tillers, robotics, marine engines, personal watercraft and power generators. The home of Honda is located at Minato, Tokyo, Japan (Wikipedia 2010).Macro-environment for automobile application in drove province (PEST abstract)Firstly, the self-propelled sp here of influence is an important yet complicated sector. However, they could use PESTLE analysis to help them in making strategies. PESTLE analysis is a tool that can help organizations making strategies by let them know about the external environment so they could plan their unravel time whether they want to operate now or operate in the future. PESTLE stands for political, economic, social, technological, legal and environment.PoliticalThe good deal result see a continued progress in the ruinous steps which have oblige the industry into a social politico economic corner. Whether this is related to matt demand or to the industrys creation of an ever-wider range of fomites that many an(prenominal) buyers seem to trouble little about, there is a puzzle. The manufacturing is like linked approach to the policies of governments, the cabbage of banks. Little wonder then that so many emerging countries are keen to develop an auto sector or that there is much(prenominal) a poli tical pressure to protect it in the developed countries. The worlds vehicle industry is currently dominate by little more than a handful of firms, each wielding colossal financial, emotional and political power. The manufacturing closely to dealings with political institutions has not always been bright. It tends to be good on skilful issues, although it has not always fully presented the longer-term options, but in order to practice the choices and their clear.EconomicFor much of the developed world, and increasingly for the developing world, the self-propelled industry is a pillar industry, a flag of economic progress. Without an automotive industry, it is impracticable to develop an efficient steel business, a plastic industry or a glass sector other central foundations of economic progress. The automotive industry has been a core industry, a unique economic phenomenon, which has dominated the twentieth century. However, the industry now suffers from a series of structural schisms and has gravel riddled with contradictions and economic discontinuities. For the capital markets and the finance sector, it has lost a raft of its significance, as a result of ever declining profits and stagnant sales. The proliferation of products operator that it has become hopelessly wasteful of economic resources. While all these and more sound like a real gloomy assessment of such a huge economic phenomenon, the industry is not in the end despondent. A different future is possible for the industry, a highly suited one.SocialThe worlds automotive industry affects the society as a whole. It employs millions of people directly, tens of millions indirectly. Its products have transformed society, bringing undreamed-of levels of mobility, changing the ways people blistering and work. The social value of the additional mobility that this industry brings involves the value of the people being able to commute over longer distances easily, among many others. For most of its earth the motor industry has been a model of social discipline and ascendency and it is not just that the auto sector offers a pillar of something else. there are, on the other hand, particular social issues to address in many developing countries, often those that are the result of an undertone of religious faith. The automotive industry has the role to play in helping develop the mobility of such countries and it can be achieved at an acceptable social cost of the surface area is prepared to learn the necessary lessons from those who have traveled this route forrader it, and to make the necessary investments. expertThe automotive industry works on a scale so awesome and has an influence so vast that it is often difficult to see. The level and diversity of technologies that it must deploy are increasing, which imposes both wise investment burdens and new uncertainties and risks. Roughly a million new cars and trucks are built around the world each hebdomad they are easil y the most complex products of their kind to be manufacture in such volumes. The industry uses manufacturing engine room that is the cutting edge of science. only when lock in, the potential for developing coordination skills, intellectual capabilities and emotional sensitivities through electronic technologies reside far from fully exploited. There are numerous additional near-term technological opportunities to adapt the automobile to changing energy availability. The possibilities suggest that automotive technology is unexpectedly robust and provides a powerful defence against energy starving even if the real price of oil climbs steadily during the next compeer of decades.LegalThe automobile industry is subject to numerous technical directives and regulations, as well as code of a more legal nature. The legislation covers areas such as competition law, intellectual property law, consumer protection and taxation, and emissions (air quality and fuels). When the auto split industry reached full development, accelerated technological efforts were made to bring to pass a web of local suppliers that would make it possible to reckon the growing legal requirements for the national integration of production.EnvironmentalOther than the vehicles themselves, and the roads and fuel needed to run them the business is intricately tied to the manufacture of a wide range of components and the extraction of precious raw materials. Indirectly, it brings people road congestion, too many fatalities and a wave of other environmental troubles. The effect to the automotive companies are that they needed to establish RD centres to take gather of research infrastructure and human capital, so that they can develop vehicle products locally to satisfy the requirements of the environmental and safety regulations more effectively.PEST of Honda in MalaysiaPoliticalMalaysia is a developing country. From the year 1960 to 1971, the countrys economy was dependent on farming and primary commodities such as rubber and tin. Nowadays, Malaysia is a middle-income country with a multi-sector economy. The GDP growth rate was 5.8% in 2006 and 5.9% in 2007. domestic demand and dynamism in merchandises are the main reasons for the economic stableness in Malaysia. Malaysias economic is now depending on industry, agriculture, and services sector, which contributes nearly cxv% to the GDP at 2007. Along with the research, Malaysia is one of the worlds main exporters of vehicle parts, accessories and components and to Thailand, Singapore, Taiwan, Indonesia, Japan and UK. The automobile parts industry in Malaysia is maintaining the high reputation among their precious customers locally and also in other country. Engineering capabilities, industrial master plans, and technology advancements are the main factors for the high reputation. The demand for Malaysias automobile parts are continually increasing, especially among major automobile companies like Mercedes, Mazda, Ford, habitual Motors, Suzuki, Nissan and Mitsubishi. Besides that, there are 343 automobile parts manufactures in Malaysia. Is up until now, RM 8.2 billion was invested by automotive components and parts manufactures in auto parts industry (MSC, 2007).EconomicsMalaysia is dedicated to fulfill its multilateral commitments under WTO and AFTA and has taken steps to liberalize its duty structure. Other measures have been taken as well. Since 2001, the equity policy for the automobile sector has been relaxed to allow up to 51% foreign equity on a persona by case basis. Besides that, in Malaysia manufacturers and assemblers are currently free to multi-source from the most matched suppliers globally, uninhibited from local content policy requirements (ELM, 2007).SocialMalaysias population was estimated at 25.2 million in 2007, every years growth rate of 1.7 percent. More than 60 percent of the population in Malaysia is Malays and other is Indians (8 percent) and Chinese (32 percent). somewhat 44 percent from the total population is consider to be trained or skilled workers with basic qualifications or higher. Malaysians employees work a marginal of 48-hours per week and also have more holidays compared with China. Until now, the labors costs are still relatively standard compare with other countries in Asia, including Vietnam and China. In addition, Malaysians wages can be divided into two types one is monthly nominal wages and the other is average wage for an employee in the manufacturing industry (Kiat, 2008).TechnologicalMalaysias infrastructure is good and presents considerable benefits to automobile supply chain operation. Malaysia has 80,328-km road network, highways, and main roads. This mode of transport represents 90% of the goods and passengers traffic in Malaysia. In addition, Malaysia has rail network of more than 2,000 km, mainly located in Kuala Lumpur and along the coast of the Strait of Malacca. The railway service in Malaysia is continuous ly modify by the government. Such as KTM and LRT. Besides that, there are collar main ports and two airports in Malaysia currently growing in equipment casualty of exports. Such as KLIA and LCCT. (Kiat, 2008).PEST ANALYSIS OF INDIAN AUTOMOBILE pains PoliticalIndian government had launched the auto policy for its Self continue growth. The government also allowed the foreign equity investment up to vitamin C% formulation of fuel policy to promotes for vehicles propelled by AESEconomicThe tax wills deductions up to 150% for in house RD activities. Reduce the interest rates for export financing. Economy of India has grown over 8.5% per annum for last 5 years. The industry sector has grown 8-10 % for last few years. More than 90% CV foreshorten is on credit.SocialThe social changed lifestyle of people leads to increased get of Automobiles. The Average family size is 4 which make it favorable to buy a four wheeler. 4th largest economy on purchasing parity indication increase in per capital income levels. The Indian customers are highly amend and well informed and they are price sensitive. They choice for small and foreshorten car preference for Fuel efficient cars with low maintenance.Technological applied science is more and more emphasis on RD. The government is promoting the NATRIP (National Automotive interrogatory and RD Infrastructure Project) to support the growth of Auto industry in India. Customized solutions can be provided with proliferation of technology. To entry of global brands both product and production affect has been improved.ACTUAL AND POTENTIAL IMPACTS OF GLOBALIZATION TO HONDAMovement of capitalIf the companys capital flows around different countries, the production base of a developing economy would get to enhance. Then, it could enable savings for the entire globe and exhibited high investment potential. It is very important for the country which developing their economy. Developing countries would prefer more on foreign direct investment rather than portfolio investment because portfolio investment does not have a direct impact on the productive power expansion.Brand awarenessHonda will become more famous when they extend their company. It will create the opportunity to let the public know more about this company. For example like what is the item that selling in the company, where is their headquarters and etc. Since Honda is producing variety of items, it will be better for public to know the details about this company.TechnologyWhen Honda has been globalized, the brand awareness of Honda will unquestionably increase so it could attract more specialist or industry people who wanted to join their company and create new items with them. Besides that, it could help to improve the technology of the world. It is because whenever Honda had come out with a new item, they will sell or share it in all around the world. Therefore, even though the country does not create that item, they also have the opportunit y to use it. So it means that the technology of the world will be increasing.Reduce global warmingHonda had produced cross vehicles in order to solve our earth problems like reduce the air pollution and the number of petroleum which is getting lesser and lesser. crisscross vehicles are encouraged to use by public as it could at least help out a little for our earth to reduce the global warming issues.STRATEGIES TO subjugate THE POTENTIAL IMPACTS OF GLOBALISATIONBuild new situation or milling machineryIn order to create Honda awareness, Honda should build more office and milling machinery at other area where Honda does not have any office or factory at there. It could make the public to have more working opportunity and at the same time they will more understand about Honda. Besides that, Honda could also try to export their produced items to other potential country which they have not export any of their items to that country in order to create awareness.New recruitmentIn ord er to create more and more technology items, Honda should hire more specialists or people who familiar with this industry to join Honda. It is because when they create new technology item, it will make our life easier. For example, Honda had created the ASIMO robot to assist us with our day-after-day life. It can also help the people who are not stratagem to move around or disable person to do those casual tasks such as pour water, sweep the floor and etc. piss variety of itemsIn order to reduce the global warming problem and at the same time can satisfy the customers needs, Honda have to create variety of items for them to choose. Therefore, everyone will use their items and help to save our environment. It can benefit both sides which is Honda and the earth environment. It is because if Honda really does that then Honda could earn the profit while the environment is getting protected with lesser pollution. For example, Honda could design more Hybrid vehicles in order public coul d have more choices to choose when they choosing Honda Hybrid vehicles.