Wednesday, July 19, 2006

Excess Capacity at Proton

We have learnt about excess capacity in monopolistic competition and other imperfectly competitive market structures.

What is excess capacity then?? Revision

In this article, it was mentioned that Proton, our national car maker is running on 40% spare or excess capacity, meaning that Proton is operating at 40% less than the optimum (ideal) capacity. A cause for concern no doubt.

"Some of the trucks load to just to 60%," he says, "compared with 90% at Toyota. We're paying for air." Zainal admits that Proton's three assembly lines have about 40% spare capacity.

What could be the reason(s) for the fall in sales of Proton cars??

1 comment:

Anonymous said...

the reasons can be:
1. quality of car is bad
2. proton is not branded as other brands
3. design of cars dos not suit to customers taste
4. proton administrators does not improve quality of after sales services
5. proton management predict wrong trends of sales and so have excess capacity
6. proton din try for other ways to promote and advertise
7. proton may has poor internal management and control
8. they do not try on makeing creative product to attract more customers
9. local market for proton is saturated
10. proton gives consumers a bad image.. for some consumers, proton is low-class car