FUNDEMENTAL OF MICROECONOMICS

ECO 162

IMPORTED CARS

NAME STUDENT ID
HAZIQ HADIF BIN MD SAZUKI (2020175477)
MUHAMMAD ADIB BIN MD NOR (2020167589)
FARIS KHAIRI BIN KHAIRUL FITHRI (2020166143)
MUHAMMAD ARIFF HAIKAL BIN SAIFUL KAMAL (2020924815)
NUR FATIHAH ADRIANA BINTI MOHD RAZI (2020926927)
BALQISH INSHERAH BINTI AHMAD RUSDI (2020790279)

PREPARE FOR:
MADAM JAMILAH BINTI LAIDIN

SUBMISSION DATE:
21 JANUARY 2021
Table content
Topic Page Number
1.0 Introduction 1-2
2.0 Supply and Demand analysis
2.1 Supply analysis 3-6
2.2 Demand analysis 7-11
3.0 Theory microeconomics 12-13
4.0 Effect of Covid-19 towards imported cars 14-17
5.0 Conclusion 18
References 19
Appendix 20
 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : HAZIQ HADIF BIN MD SAZUKI

Student’s ID : 2020175477 Student’s I/C No. : 000925100231

Program Code : BA111 Part : 2 Course Code : ECO162

Course :
Name MICROECONOMICS

Assignment/ Due Submission

Project No. : Date : 21/1/2021 Date : 21/1/2021

Assignment/ :
Project Title IMPORTED CARS

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2021 HAZIQ HADIF

Date Student’s Signature

 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : MUHAMMAD ADIB BIN MD NOR

Student’s ID : 2020167589 Student’s I/C No. : 990807-07-5763

Program Code : BA111 Part : 2 Course Code : ECO162

Course :
Name MICROECONOMICS

Assignment/ Due Submission

Project No. : Date : 21/1/2021 Date : 21/1/2021

Assignment/ :
Project Title IMPORTED CARS

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2021 Adib

Date Student’s Signature

 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : FARIS KHAIRI BIN KHAIRUL FITHRI

Student’s ID : 2020166143 Student’s I/C No. : 970523-10-5897

Program Code : BA111 Part : 2 Course Code : ECO 162

Course :
Name MICROECONOMICS

Assignment/ Due Submission

Project No. : Date : 21/1/2021 Date : 21/1/2021

Assignment/ :
Project Title IMPORTED CARS

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2020 FARIS KHAIRI

Date Student’s Signature

 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : MUHAMAD ARIFF HAIKAL BIN SAIFUL KAMAL

Student’s ID : 2020924815 Student’s I/C No. : 010314-08-0533

Program Code : BA111 Part : 2 Course Code : ECO162

Course :
Name MICROECONOMICS

Assignment/ Due Submission

Project No. : Date : 21/1/2020 Date : 21/1/2020

Assignment/ :
Project Title IMPORTED CARS

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2020 Ariff Haikal

Date Student’s Signature

 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : NUR FATIHAH ADRIANA BINTI MOHD RAZI

Student’s ID : 2020926927 Student’s I/C No. : 010329020672

Program Code : BA111 Part : 2 Course Code : ECO162

Course :
Name MICROECONOMICS

Assignment/ Due Submission

Project No. : Date : 21/1/2021 Date : 21/1/2021

Assignment/ :
Project Title IMPORTED CARS

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2021 Fatihah adriana

Date Student’s Signature

 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : BALQISH INSHERAH BINTI AHMAD RUSDI

Student’s ID : 2020790279 Student’s I/C No. : 010528-07-0082

Program Code : BA111 Part : 2 Course Code : ECO162

Course : MICROECONOMICS
Name

Assignment/ Due Submission

Project No. : Date : 21/01/2021 Date : 21/01/2021

Assignment/ : IMPORTED CARS

Project Title

Lecturer’s Name : MADAM JAMILAH BINTI LAIDIN

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

19/1/2021 Balqish Insherah

Date Student’s Signature

1.0 INTRODUCTION

If we want to go somewhere, buying a vehicle is one thing we want to consider. Owning

your own car is very important nowadays for those who work and have a family for
them to carry out daily activities such as going to work or sending their children to
school. From that, we definitely want to get a car for we to have an access to easy
transportation. We have an option either we want to choose local car or imported car.
Imported cars means the cars are made outside from Malaysia. Most of consumers
chose imported cars because its attractive and stylish design. The presence of
imported cars does not mean the cars are produced in Malaysia are not of high quality.
Nowadays, we don’t need to worry about a spare parts and accessories of imported
cars if we use the cars in Malaysia because a lot of workshop in Malaysia has provided
an imported cars spare parts and accessories.

In advance technology nowadays, a supplier of a car has released a lot of model of

car regardless of whether from within the country or abroad. Among the types we often
see on the road are sedan, sport cars, coupe, luxury cars and etc. Each types of car
have different uses such as sedan is used for family trip while sport cars cannot do
that.

Not only there are many types of cars that we can see on the road, there are also many
different brands of imported cars that we can see such as Honda, Audi, Volkswagen,
Ferrari, Lamborghini, Ford and etc.

1
 BRAND TYPE IMAGE ESTIMATED
PRICE
HONDA 1. Sedan
2. Coupe From RM 80,000
3. Hatchback and above
4. SUV

VOLKSWAGEN
1. Sedan
From RM 60,000
2. Coupe
and above
3. Hatchback

AUDI

1. Sedan
From RM 90,000
2. Coupe
and above
3. Sport car

FORD
1. Pickup From RM
2. Van 100,000 and
3. Off-Road above

The table shown some of the imported cars list in our country’s market. If we want to
buy a car, we need to do some survey before we make a decision. When we want to
buy a car, we will find a lot of vary in terms of costs. However, we need to choose a
car according to our financial level. Some imported car prices in the market can reach
up to hundreds of thousands Ringgit Malaysia (RM). This is because if we buy an
imported car, we will be charged an import tax. Nowadays, it is easier to find an
imported cars seller. Not only that, there are a lot of imported cars center we can find
in our country. As a seller, they need to provide the best quality cars with best price to
the consumers.

2
2.1 Supply analysis
Supplying is important for imported cars because cars are one of our needs in life. As
we can see, supply is needed to keep the imported cars available for people to satisfy
their needs by own a luxury goods to live comfortably. Some examples for imported
cars are Toyota, Mercedes and Hyundai. The purpose of supply is for the producer to
gain profit and it is defined as the producer’s ability and willingness to supply different
quantities of goods and services at different possible process and time range, ceteris
paribus. The law of supply states that when the price of a good itself increases, the
quantity of supplied for the good increases and vice versa. It shows a positive
relationship between the quantity supplied and the price of good itself. However, the
law is only true by assuming other factors influencing supply are held constant, only
the price of good itself changes. Therefore, the supply curve will generally be upward
slopping, indicating the positive relationship between the price of a good or service and
the quantity supplied.

The table below shows a few companies who sells imported cars:

1. KW99 import Sdn. Bhd Georgetown, Penang

2. HOCK LEE HENG Butterworth, Penang
3. Afcar auto (m) Sdn. Bhd Penang
4. MTM Motosport Sdn Bhd Lahat, Perak
5. DTC Motors Sdn Bhd Kuala Lumpur

3
2.1.1 Number of sellers increases
The number of sellers affects the number of imported car supply. It is because the
more outputs can be produced in the market. But during covid-19 the number of
imported cars keep reducing and makes the supply decreased. The diagram below
shows the supply curve shift to the left.

Price S1

S0

Quantity

Diagram 2.1.1 supply analysis

The pandemic covid-19 that suddenly hits Malaysia during March 2020 and April 2020
has impacted cars industry in Malaysia and have a huge problem which is the number
of cars unsold is greater and it makes the supplier needs to reduce the salaries of the
workers because of the shortage of money. It caused a huge impact for cars industry
when Movement Control Order (MCO) were enacted by the government. Covid-19 also
has impacted the whole sellers during MCO (Movement Control Order) on March 2020
to April 2020. It makes the suppliers cannot get the supply from the overseas to get
the imported cars in the Malaysia. The supplies keep reducing during the MCO and
the demanded of imported cars also keep reducing because of the shortage of salaries
in Malaysia during that time.

4
2.1.2 Level of technology
The advance in technology of imported cars make the supply keep increasing. It is
because of the smaller quantity of resources used for the production and it will reduce
the cost of the production itself. The diagram below shows the supply curve shift to the
right.

Price
S0

S1

Quantity

Diagram 2.1.2 supply analysis

It shows that the advance of technology in imported cars also influence the numbers
of supply and quantity demanded. It is because the higher levels of technology will
increase the quality of imported cars.

“Technology has already redefined the way cars use fuel, with electric, hybrid and solar
energy systems beginning to displace the internal combustion engine and gas-fed
engines as the driving force of the future.” – oponeo blog

5
2.1.3 Design of the imported cars
This situation happens because of some resources are being used and it is one of the
factors for the supply curve to shift leftward. The diagram below shows the supply
curve shift to the left

Price
S1

S0

Quantity

Diagram 2.1.3 supply analysis

It shows that if the design of the imported cars also makes the number of supplies keep
increasing and the quantity of supplies will increase if the design of imported cars is
attractive. Imported cars design will influence the buyers and the quantity of demand
will keep increasing. Another factors that contribute to increasing quantity supplied of
imported cars is their performance. The greater the performance car, the more supply
if imported cars.

6
2.2 Analysis of demand

Demand is defined as the different quantities of goods or services which is buyer are
willingly and able to buy at different possible prices in a given period of times, ceteris
paribus. Demand is referring to effective demand. Malaysian consumer mostly
demands in imported cars because they more efficient, had better performance and
had better technology than local cars. Imported cars such as Mercedes-Benz, Honda,
Porsche, Nissan, Hyundai were always high in demand in Malaysia. Because of the
demand in imported cars are always increasing in Malaysia, it causes the graph to shift
to the right every year.

Price

D1
D0
Quantity

Demand curve shift to right from D0 to D1

It is true that every year, the graph of demand curve for imported cars always shifts to
the right. But, in year 2020 it shows the vice versa with the graph of year before.
Demand of the imported cars drops drastically because the pandemic Covid-19 effect
to the worldwide. This makes the demand curve shift to the left due to decreasing of
demand towards imported cars.
Price

D0
D1
Quantity

Demand curve shift to left from D0 to D1

7
There are a few factors that contributes toward increasing in demand of imported cars.
The factors are increase of price of imported cars, income levels, consumer tastes and
preferences and competition in cars.

2.2.1 The increase of price of imported cars

As the price of imported cars increases, the consumers demand in buying imported
cars also increase. The increase of price in imported cars are cause by new technology
features of the cars. Even though the cars price increase, the demand of the imported
cars also increases.

Price

D1
D0
Quantity

2.2.1 Demand analysis

As shows in graph above, people are willing to buy any imported cars even their price
increase. They will put the effort to gain the imported car that they dream of because
of a few factors such as design and performance.

Picture 1.0 Election manifesto

https://paultan.org/2020/01/13/locally-assembled-vehicles-may-cost-more-report/

8
Picture 1.0 shows one of major factors demand curve shift to the right is about
manifesto that was tell about the reduce of excise duty to imported cars 1600cc engine
and below for the first buyer that have income below than RM 8,000. This will make
the demand for imported cars be higher and keep increasing from year to year.

2.2.2 Income levels

As the income of a person goes up, their willingness to buy goods and services
increases, allowing demand to rise. As the individual’s income increases, the thought
of exchanging to a new car are always be in their mind. The consumers tend to buy
imported cars rather than local cars because they are easy to get. With this, we can
say that the higher the income level of a person, the higher the demand towards
imported cars as shown in demand analysis 2.2.2

Price

D1
D0
Quantity
2.2.2 Demand analysis

Picture 2.0 Average Salary 2021

http://www.salaryexplorer.com/salary-survey.php?loc=130&loctype=1

9
Picture 2.0 shows the average of salary people in Malaysia. This is one of the reasons
why demand curve for imported cars keeps increasing. Year by year, people will be
promoted and their salary will be increase. They also will gain bonus from their well
performance.

2.2.3 Consumer tastes and preferences

Consumer changing their taste and preferences for various goods can have a major
impact on demand. Their minds set on having imported cars can sometime because
of the new technology featured, the trend of having that type of car brand, the colour
preference that a car available and many more that can cause the demand of imported
cars increase. Also, persuasive marketing of these imported cars is designed to make
a shift in taste and desire that make growth of demand in imported cars.

Price

D1
D0
Quantity
2.2.3 Demand analysis

Picture 3.0 Advance Driver Assist System

https://www.kbb.com/awards/best-car-technologies/

10
Picture 3.0 shows the advance technology that was created in this new world. Advance
driver assist system help peoples to react quickly towards hazards, reduces the driver
fatigue and help to make easier life in traffic. This system also can help to park the car
by itself.

Picture 4.0 Toyota Supra

https://www.hotcars.com/2020-most-unique-trendy-car-paint-colors/

Picture 4.0 is the new brand car that is produce by Toyota that has enter Malaysia
market recently. Toyota Supra with the unique type of body kit and its own performance
will make people in Malaysia want to buy it. This creation of Toyota will attract many
people to buy and will increase the demand for imported cars in Malaysia.

11
3.0 Theory of Microeconomics

Costs of production are payments made by firms to the factors of production used in
in producing the output of goods and services. The extent to which a firm can adjust
the factors of producing will depend on the time period involved, whether it is in short
run or long run. Short run is a period where at least one of the inputs must be fixed.
Long run is period where all inputs are variable. There are fixed inputs and variable
inputs as discussed earlier in this chapter. Payment for the cost of fixed inputs is called
fixed cost. Likewise, payment for the cost of variable inputs is known as variable cost.
The cost of production is related to the factors of production. There are two categories
of costs of production which is implicit cost and explicit cost. Implicit cost is not and
accounting cost and is only viewed as an economic cost. For explicit cost is the real
payment for any transactions which are purchased for production purposes and will be
documented accordingly. Economic costs are not usually recorded in the accounting
books of firms or enterprises. Economic profits are the differences between monetary
costs and opportunity costs a firm endures and the revenue a firm obtains.

Short run can be defined as the time period over which a production uses at least one
fixed input with one or more variable inputs. In the short run, the firm cannot increase
its production by changing its fixed factors. The imported cars company who is use a
short run are Proton and Perodua. Malaysia had been committed to be an automotive-
producing country through the establishment of Proton in the year 1983. Established
in 1993, Perodua had established and launched its first car in August 1994. People
are attracted to purchases a car due to a number of factors. These company cannot
expand their land and labour and has been limited their labour because lacks of
demand from customers. This company can supply a standard criterion that can
satisfied a customer because their products is suitable and affordable for a low
maintenance car. Besides, this company is famous among Malaysian and not a first-
choice company to satisfied customers wants for the cars.

Long run is a time period which is sufficient in length to permit all inputs to be varied.
Firms can increase the scale of all its inputs. There are no fixed factors in the long run.
Capital is variable as the firm can add more machines to the long run process. The
flexibility of producers to transform fixed inputs to variable inputs is the key feature in
the long run production period.

12
Long run is a time period where there are no fixed inputs. There are only variable inputs.
It means that firms can increase or decrease their production by changing all their
inputs. The production function in the long run is land, labour, capital and entrepreneur,
where output is a function of land, labour, capital and entrepreneur as all inputs are
variable factors. There are many imported cars company use long run production
which is Toyota, Lamborghini, and Honda. The companies can expand their production
by increasing the technical economies. Large scale firms can afford to use the most
modern, and efficient productive machinery and equipment compared to the small
firms. It will make these companies more advanced, modern and productivity. Besides,
these companies also can increase their division of labour to refers to the specialization
of labour and allows the workers to concentrate and specialize in jobs that they are
more capable. A worker who concentrates on one task is more efficient and productive
than the same worker who is burdened with several tasks.

13
4.0 Effects of Covid-19 towards imported cars industries

The Covid-19 virus has affected the world in every way. Daily businesses are affected
the most as the government declare quarantine. In Malaysia, the government declare
Movement Control Order (MCO) and business sales are falling as the people are
advised to stay at home. This has also taken effect on imported cars industries.
Some of the effects of Covid-19 towards the imported cars industries is rate of
sales falling at a high record. China’s car sales have been plummeting at a record of
80%. This could happen due to the quarantine as people aren’t going out. Customers
also tends to stay away from showrooms as it is advised to stay at home. This lacks of
physical visiting cause people to hold on to their money until the pandemic is over.
This does not only happen to China, but also Malaysia and the rest of the world. In
Malaysia, Head of research of RHB Research Institute, Alexander Chia said that
“Impact of Covid-19 on consumer sentiment and reluctant of potential buyers to visit
physical showrooms means that car sales will definitely be affected”. As we can
produced from the statement, the pandemic has causing serious impact to the cars
industries in Malaysia. Large car companies such as BMW has taken a step of caution
as they close all showrooms and aftersales facilities. As the time of writing, BMW had
just reopened their showrooms and aftersales facilities in Scotland, Northern Ireland
and England. Alexander Chia also told The Star “The recent developments on the local
political landscape and oil price collapse are also negative for consumer sentiment for
consumer discretionary big-ticket items”. He later said “Based on our estimates, the
new vehicle sales may have fallen around 4% year-on-year in the first two months of
2020”. Malaysia’s car sales may have not fallen as drastically as China’s car sales but
it is a step back towards the huge car industries in Malaysia.

14
 ASEAN vehicle sales as of 2019 and 2020
www.counterpointresearch.com

Based on the table above, we can conclude that vehicles sales have been going
downhill since the pandemic started. The pandemic had been taking a serious toll on
the sales of imported cars. This had been happening to most countries and it is bitter
to swallow the fact that the car industries could be taking a step back on the economy.
As of in Malaysia, car sales had been going down to a staggering percentage of -
25.9%. Malaysia is the second most affected country after Vietnam which is -31.5%.

15
 ASEAN vehicle sales as of 2016-2020
www.counterpointresearch.com

Based on the chart above, we can see that car sales had started to go downwards in
most countries starting from 2019 where the pandemic is starting. 2019 was the year
which most countries started to take the virus seriously and thus started to affect car
sales. As we know that in the earlier year of 2020 in Malaysia, the government started
to execute the Movement Control Order (MCO) and most businesses are forced to be
closed until the MCO is finished. That included the closing of showrooms, car
manufacturing factory and car dealership. Based on this, we can see that this is one
of the reasons why the market is going downhill starting from 2019.
Other than car sales, the pandemic has also led to many changes in car buyers’
attitudes and behavior. Modern features and digital services are most welcomed to the
public as many see’s these as a way to stay connected, trackable and safe. An
increasing demand on the in-vehicle screens will result in easy integration of many
digital features. Many cars manufacture such as BMW, Lamborghini, Hyundai, Honda,
Toyota and many more are starting to integrate Apple Carplay. While looking in
Malaysia, car companies such as Proton and Perodua are starting to add in-vehicle
screen with integrated Android and Apple Carplay. There are a lot of benefits from
having these modern features as they are one of the ways to stay connected even if
we are driving. For example, if we plan on going to a mall and we use the build-in
navigation in our car, the navigation system could detect hotspots for Covid-19. Thus,

16
we know if the place that we are going is safe or not. As a conclusion, the
modernization of cars features will get a boost from the Covid-19 because people are
starting to embrace a modern lifestyle that promotes social distancing, better safety,
tracking and efficiency.

www.counterpointresearch.com

As we can see, the pandemic had been affecting not only the economy and financial
sides of imported cars but also the digitalization and modernization of imported cars.
Based on the above diagram, we can see that new features such as digital keys and
gesture control on high demand. We can probably conclude this with a direct reason
prior to social distancing and the SOP’s of the pandemic. In-vehicle services are also
getting a high demand due to the pandemic. Services such as ‘pay as you go’ had
been on high demand possibly to reduce and avoid physical contact. ‘Over-the-air’ or
also known as OTA had been also on high demand. Other than that, the most important
service that are on high demand is health apps in vehicles display system. We can see
the usefulness of this services especially during the pandemic. Users can track Covid-
19 affected zones and avoid these red zones. It’s a handy feature that is on a trend.

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5.0 Conclusion
On the modern era, cars are important for us. It is for our daily use to go from a place
to another without need to use the public transportation. We can go around according
our time and stop anywhere that we want. In Malaysia, there are two types of cars.
First is local car and second is imported cars. Local car is a car which is built in
Malaysia such as Proton and Perodua. Imported cars is a car that was build outside
from Malaysia and being import inside this country. There are many brand names of
imported cars such as Honda, Volkswagen, Audi and Ford. Year by year, the curve of
supply and demand towards imported cars in Malaysia keep increasing. There are a
few factors that contribute towards the increasing and decreasing of demand and
supply. Supply is defined as the producer’s ability and willingness to supply different
quantities of goods and services at different possible process and time range, ceteris
paribus. The factors for supply shift towards right is number of sellers increases and
the design of imported cars. While the factor that leads towards supply curve shift to
the left is level of technology. Demand is defined as the different quantities of goods
or services which is buyer are willingly and able to buy at different possible prices in a
given period of times, ceteris paribus. The factors that affect towards demand curve
shift to the right are the increase of price of imported cars, income levels and consumer
taste and preferences. The theory of microeconomics for imported cars is production,
cost and revenue theory. Why we say so? Short run is defined when there is at least
one fixed cost either land, labour, capital and entrepreneur. While long run is defined
as there are no fixed cost. There is only variable cost. Local cars can be group under
short run because of they have the fixed cost such as land and capital. Imported cars
can be group as long run because there is no fixed cost. They only have variable cost
which mean they are capable in increasing their land, labour, entrepreneur and capital.
During the pandemic Covid-19 that hit the entire world, the demand and supply curve
of every cars company shift to the left. Because of the Movement Control Order (MCO)
and Total Lockdown that was being applied in a country. Not only in Malaysia but also
in Thailand, Vietnam, Philippine and Indonesia. People can’t go to show room or test
drive any car because of Covid-19. Plus, their income or saving slowly downward
sloping because some of them have to cut their salary into half in order if they want to
stay in that company while some of them have been dismissed from the company in
order the company want to survive.

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APPENDIX

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