CHAPTER 1: INTRODUCTION 1.0 Introduction The definition of “Car” is a four-wheeled motor vehicle used for the transportation of passengers and goods (Chew, 2012). The PROTON brand is a truly national car made in Malaysia. The national car manufacturer, Proton Holding Bhd (PROTON), has been one of the pioneer companies in the Malaysian car market, serving the local and export markets and was the leading company in car sales until May 2011 (Chew, 2012 ). The automotive industry is one of the heavy industries that has contributed to Malaysia's GDP and has brought benefits to the Malaysian economy (Chew, 2012).1.1 The Development of Automotive Industry in Malaysia The automotive industry in Malaysia started for the first time with the implementation of the import industrialization strategy in 1960, when the Malaysian Automotive Association (MAA) was founded in November 1960 (Rosli, 1994). In the initial stage, Malaysia only carried out passenger and commercial vehicle assembly business. The main objective is to reduce the import of completely built units (CBUs) to stabilize the balance of payments. Not only that, it also creates more job opportunities to reduce the unemployment rate. In 1970, the Malaysian government promoted the “Local Content Policy” to enhance the development of local industry and components in Malaysia. The government played a vital role in establishing the profile of the Malaysian automobile industry in order to implement the National Economic Policy (NEP) in 1971. In early 1980, another phase of the NEP was created by the government to develop the automotive project (Proton). and steel mill (Perwaja). Investment tends to increase in these projects due to higher import duties imposed on both automobiles and steel. In order...... middle of paper...... demand for cars in the market. Therefore, Proton manufacturers will take these factors into consideration during planning and decision making in the production of the cars. Apart from these, this research also helps the government to manage specific strategies towards the Proton related automotive industry for supplying the automotive industry in order to increase the demand for Proton cars. 1.5 Scope of the Research Among the domestic cars produced in Malaysia, Perusahaan Otomobil Nasional Berhad (PROTON) focused the most in this research. This research will cover annual data starting from the year 1980 to 2012. Only secondary data is involved in this research to find out the relationship between the required proton factors and total proton recorded in Malaysia. Meanwhile, the factors affecting the demand for Proton will also be considered in this study.