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Is There an Overlapping Market between National Car Producers in Malaysia?

Author

Listed:
  • Drebee, Hayder Abbas

    (College of Administration and Economics Al-Qadisiyyah University, Al-Diwaniyah, Iraq)

  • Abdul Razak, Nor Azam

    (School of Economics, Finance and Banking Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, MALAYSIA)

  • karim, mohd

    (Othman Yeop Abdullah Graduate School of Business Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, MALAYSIA)

Abstract

This paper examines how the choice of three broad categories of automobiles in Malaysia (i.e. Proton, Perodua, and foreign automobiles) is affected by a change in the price of a specific car model. Using a sample of 478 automobile owners in Malaysia, a discrete choice analysis is conducted based on the conditional logit model. In general, it is found that the own-price effect on Proton (Perodua) cars is negatively related to a specific Proton (Perodua) model; in contrast, the cross-price effect on Proton (Perodua) cars is positively related to a specific Perodua (Proton) model. Of the nine models evaluated, three of them show a significant overlapping market segment. This finding implies that Proton and Perodua should differentiate these products further to lessen competition between them.

Suggested Citation

  • Drebee, Hayder Abbas & Abdul Razak, Nor Azam & karim, mohd, 2014. "Is There an Overlapping Market between National Car Producers in Malaysia?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 48(1), pages 75-85.
    • Handle: RePEc:ukm:jlekon:v:48:y:2014:i:1:p:75-85
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Automobile choice; Perodua; Proton; conditional logit model; overlapping market;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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