Perodua Assignment Company Essay Example
Background Information about Perodua Company/Product and Services
Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is a Malaysian automobile manufacturer that was established in 1992. It is a joint venture between Malaysian and Japanese car companies, UMW Corporation Sdn Bhd and Daihatsu Motor Co. Ltd, respectively. Perodua is known for producing affordable and reliable cars that cater to the needs of the Malaysian market. The company’s mission is to become a leading regional automotive player that provides high-quality products and services.
Perodua’s success can be attributed to its focus on delivering affordable, high-quality vehicles to its customers. The company’s products are known for their fuel efficiency, low maintenance costs, and reliability, making them a popular choice for many Malaysian consumers. According to a report by Frost & Sullivan, Perodua is the second-largest car manufacturer in Malaysia and has a market share of around 40% in the small car segment (Frost & Sullivan, 2020).
Perodua’s commitment to producing high-quality, affordable cars have also earned it several awards and accolades over the years. For instance, the company was named Malaysia’s most trusted automotive brand in 2020, based on a survey by Reader’s Digest Asia (Reader’s Digest Asia, 2020). Perodua has also been recognized for its commitment to environmental sustainability, having received the “Eco-Label” certification from the Malaysian government for several of its models (The Edge Markets, 2021).
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Purpose of the paper
The purpose of this paper is to provide an overview of Perodua’s history, product line, marketing strategies, competitive analysis, corporate social responsibility initiatives, financial performance, challenges, and future outlook. The paper aims to analyze Perodua’s success factors and identify areas where the company can improve its operations to maintain its position as a leading automotive player in Malaysia.
Perodua has established itself as a key player in the Malaysian automotive industry by producing affordable and reliable cars that cater to the needs of the Malaysian market. The company has implemented effective marketing strategies and engaged in corporate social responsibility initiatives to establish a strong brand image and increase its market share. However, the company faces challenges such as intense competition, changing market trends, and evolving customer preferences. This paper aims to analyze Perodua’s success factors, challenges, and future outlook and provide recommendations for the company’s management to maintain its position in the industry.
History of Perodua Company
Founding of the company
Perodua was founded in 1992 as a joint venture between Malaysian and Japanese car companies, UMW Corporation Sdn Bhd and Daihatsu Motor Co. Ltd, respectively. The company was established to produce affordable and reliable cars that cater to the needs of the Malaysian market.
Early development of the company
In its early years, Perodua focused on producing compact cars such as the Kancil and Rusa. In 1994, Perodua launched its first car, the Perodua Kancil, which was based on the Daihatsu Mira. The Kancil was a huge success in the Malaysian market due to its affordable price and fuel-efficient engine.
These cars were popular among Malaysian consumers due to their affordability, fuel efficiency, and reliability. In 1996, Perodua introduced the Kembara, a compact SUV that was also well-received by Malaysian consumers.
The company continued to produce cars based on Daihatsu models, such as the Rusa, Kembara, and Kenari.
Growth and expansion of the company
Perodua continued to expand its product line and market share in Malaysia. In 2005, the company launched the Perodua Myvi, which was the first car designed and developed entirely by Perodua. The Myvi was a game-changer for Perodua as it became the best-selling car in Malaysia and helped the company to increase its market share.
In recent years, Perodua has continued to launch new models, such as the Axia, Bezza, and Alza, to cater to the needs of different segments of the market. The company has also expanded its production capacity and invested in research and development to enhance its product offerings.
Perodua’s growth and expansion in the Malaysian market have been attributed to the company’s ability to produce affordable and reliable cars that cater to the needs of the local market. The company’s marketing strategies, such as promoting fuel efficiency and safety features, have also contributed to its success.
Recent developments and achievements
In recent years, Perodua has focused on improving the safety features of its cars and introducing more environmentally friendly vehicles. In 2020, the company introduced the updated version of the Bezza, which featured improved safety features such as Vehicle Stability Control (VSC) and Traction Control (TRC). In the same year, Perodua also introduced the Ativa, a compact SUV that was marketed as the company’s first turbocharged vehicle.
In 2021, Perodua achieved a new milestone by producing its 3 millionth car since its inception. The company also announced that it had achieved its best-ever monthly sales record in July 2021, selling over 25,000 units of its cars (Nair, 2021). The company also continued to expand its market share, with a 41.1% share of the Malaysian automotive market in 2021.
Perodua has also received recognition for its efforts in producing eco-friendly cars. In 2021, the company received the “Energy Efficient Vehicle Manufacturer of the Year” award at the Frost & Sullivan Asia Pacific Best Practices Awards for its efforts in producing energy-efficient cars (Frost & Sullivan, 2021).
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Perodua’s Product Line
Perodua’s product line offers a wide range of choices to customers, catering to different market segments with different needs and preferences. By focusing on affordability, reliability, and practicality, Perodua has established itself as a leading automotive brand in Malaysia.
Overview of Perodua’s product line
Perodua’s product line consists of four main models, namely Myvi, Axia, Bezza, and Alza. These models cater to different market segments, offering a wide range of choices to customers. Perodua has been successful in developing and marketing affordable cars with good quality and features, which are well-suited to the needs of Malaysian consumers.
Product differentiation and market positioning
Perodua’s product differentiation and market positioning strategy have enabled the company to carve out a niche for itself in the Malaysian automotive market. Perodua has positioned itself as a manufacturer of affordable, reliable, and fuel-efficient cars, targeting the mass market segment. According to Kotler et al. (2017), positioning involves “arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers” (p. 308). Perodua’s cars are known for their practicality, user-friendliness, and low maintenance costs, making them popular among first-time car buyers and middle-income households.
Perodua’s focus on affordability and practicality has resonated well with its target market, which comprises young and middle-aged individuals who are looking for a reliable and affordable vehicle (Lee, 2019). Perodua’s products are known for their reliability, fuel efficiency, and ease of maintenance, which has helped to build a strong brand image for the company. According to Gruen (2016), “A strong brand image creates a competitive advantage for a company by enhancing customer loyalty and influencing purchasing decisions” (p. 112).
Perodua’s positioning strategy has also helped the company to gain a significant market share in Malaysia. According to Euromonitor International (2021), Perodua is the leading automotive brand in Malaysia with a market share of 43.8% in 2020. The company’s focus on affordability and practicality has helped to attract customers who are seeking a car that is value for money.
Analysis of Perodua’s key products: Comparing Strengths and Weaknesses
Myvi is Perodua’s most successful model, accounting for the majority of the company’s sales. Myvi is a hatchback car that offers a spacious cabin, comfortable ride, and good fuel economy. It comes with a range of features, including air conditioning, power windows, and a multimedia system. Myvi’s strength lies in its affordable price, reliability, and low maintenance cost. However, its weakness is its relatively low safety rating compared to some of its competitors.
Axia is Perodua’s entry-level model, targeting the lower-income segment. Axia is a compact car that offers good fuel economy, easy maneuverability, and a practical design. Axia’s strength lies in its affordability, fuel efficiency, and low maintenance cost. However, its weakness is its relatively basic features, such as manual windows, and its lack of power.
Bezza is Perodua’s sedan model, targeting the mid-range market segment. Bezza offers a spacious cabin, comfortable ride, and good fuel economy. It comes with a range of features, including air conditioning, power windows, and a multimedia system. Bezza’s strength lies in its affordable price, reliability, and low maintenance cost. However, its weakness is its relatively low safety rating compared to some of its competitors.
Alza is Perodua’s MPV model, targeting the family-oriented market segment. Alza offers a spacious cabin, comfortable ride, and good fuel economy. It comes with a range of features, including air conditioning, power windows, and a multimedia system. Alza’s strength lies in its spaciousness, versatility, and affordability. However, its weakness is its relatively basic features, such as manual windows, and its lack of power.
Marketing Strategies of Perodua
Perodua’s target market
Perodua has a broad target market, which includes both young and old consumers. The company mainly targets individuals and families seeking affordable and reliable vehicles for their daily commuting needs. Perodua’s main target market is the middle class, with a focus on budget-conscious consumers who want to own a car but cannot afford high-end vehicles (Frost & Sullivan, 2020). The company has established a strong presence in the Malaysian market by offering affordable and reliable cars that cater to the needs of different customer segments (Tien, 2019).
Perodua has also targeted younger consumers with its marketing campaigns, emphasizing the fun and practical aspects of owning a compact car. According to a report by Frost & Sullivan, the majority of Perodua’s customers are in the age range of 25 to 44 years old, and they are typically first-time car buyers or those looking for a second car for their household (Frost & Sullivan, 2020). The company has sponsored numerous youth-centric events and activities, such as music festivals and sporting events, to promote its products to a younger demographic.
Perodua’s marketing mix
Perodua’s marketing mix comprises four key elements: product, price, promotion, and place. The company has adopted a market-oriented approach to marketing, where it focuses on understanding customer needs and preferences and tailoring its marketing mix accordingly.
- Product: Perodua offers a range of affordable and reliable vehicles that cater to the needs of different customer segments. The company’s product line includes compact cars, sedans, and multi-purpose vehicles (MPVs). Perodua’s product development strategy focuses on continuous improvement and innovation to offer its customers new and improved features.
- Price: Perodua’s pricing strategy is based on affordability and value for money. The company offers its vehicles at competitive prices, which are lower than those of its competitors. Perodua’s pricing strategy has enabled it to penetrate the Malaysian market and gain a significant market share.
- Promotion: Perodua’s promotion strategy comprises a mix of advertising, sales promotions, and public relations activities. The company has invested heavily in advertising to create brand awareness and promote its products. Perodua also uses sales promotions, such as discounts and freebies, to incentivize customers to buy its products. The company’s public relations activities focus on building relationships with stakeholders, such as customers, suppliers, and the community.
- Place: Perodua’s distribution strategy focuses on establishing a strong presence in the Malaysian market by expanding its distribution network. The company has established a network of dealerships and service centers across Malaysia to ensure that its products are easily accessible to customers.
Perodua’s branding strategies: Advertising and promotional campaigns
Perodua has adopted a branding strategy that focuses on creating a strong brand image and positioning itself as a provider of affordable and reliable vehicles. The company has invested heavily in advertising to create brand awareness and promote its products. Perodua’s advertising campaigns use catchy slogans and creative visuals to appeal to its target audience. For instance, the company’s “Lagi Best” campaign for the Myvi model was a huge success, and it helped to establish the model as one of the best-selling cars in Malaysia (Tien, 2019).
Advertising is a critical aspect of Perodua’s marketing strategy as it helps to promote its products and build its brand image. The company’s advertising campaigns are designed to appeal to the emotional needs of its target market while also emphasizing the affordability and practicality of its products. According to Kotler et al. (2017), “advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor” (p. 568).
Perodua’s advertising campaigns are primarily focused on television commercials, which are effective in reaching a wide audience. The company’s television commercials are designed to showcase the features and benefits of its products while also appealing to the emotional needs of its target market. For example, the “Myvi Lagi Power” campaign emphasized the improved features and performance of the third-generation Myvi while also appealing to the emotional needs of young professionals who are seeking a reliable and stylish car.
In addition to television commercials, Perodua also utilizes other forms of advertising such as billboards, print ads, and social media. The company’s billboards and print ads are designed to reach a local audience and promote its products effectively. Perodua’s social media pages are particularly effective in engaging with its target market and promoting its products. Perodua’s Facebook page, for example, has over 2 million followers and is used to showcase its products, promotions, and events.
Perodua’s advertising campaigns have been successful in attracting new customers and building its brand image. According to Euromonitor International (2021), Perodua is the leading automotive brand in Malaysia with a market share of 43.8% in 2020. The company’s focus on affordability and practicality is reflected in its advertising campaigns, which have helped to attract a loyal customer base.
Sales promotion and distribution channels
Perodua’s sales promotion and distribution channels comprise a network of dealerships and service centers across Malaysia. The company has established a strong presence in the Malaysian market by expanding its distribution network. Perodua also offers online sales and booking services, which enable customers to purchase its products from the comfort of their homes. The company’s after-sales services, such as maintenance and repair, are also an important part of its sales and distribution channels. Perodua has established a network of service centers across Malaysia to ensure that its customers have access to high-quality after-sales services.
Sales promotion is an important component of Perodua’s marketing strategy as it helps the company to encourage customers to purchase its products by providing incentives and discounts. According to Kotler et al. (2017), “sales promotion includes a wide assortment of tools that can be used to stimulate quicker and/or greater purchase of particular products or services” (p. 571).
Perodua utilizes various sales promotion techniques to promote its products and incentivize customers to make a purchase. One of the most common techniques is offering discounts and cash rebates on its products. For example, during festive seasons such as Chinese New Year and Hari Raya, Perodua offers cash rebates and discounts to customers who purchase its products.
Perodua also utilizes contests and giveaways as a sales promotion technique. For example, in 2020, Perodua launched the “Bezza Adventure Challenge” contest, which allowed customers to win a Perodua Bezza and other prizes by completing a series of challenges. The contest was successful in generating interest and increasing sales of the Bezza model.
Perodua also provides financing options and trade-in options to customers as part of its sales promotion activities. The company works with various financial institutions to provide financing options that are affordable and accessible to customers. Additionally, Perodua accepts trade-ins of older vehicles, which can be used as a down payment for the purchase of a new Perodua vehicle.
Perodua’s sales promotion activities have been successful in encouraging customers to purchase its products. According to Euromonitor International (2021), Perodua is the leading automotive brand in Malaysia with a market share of 43.8% in 2020. The company’s use of discounts, contests, financing options, and trade-ins as sales promotion techniques has helped to attract a loyal customer base.
Overview of the automotive industry in Malaysia
The automotive industry in Malaysia is a significant contributor to the country’s economy, generating over 4% of Malaysia’s GDP and providing employment opportunities for over 700,000 people (Frost & Sullivan, 2020). The industry has a market size of approximately 650,000 vehicles sold annually, and it is the third-largest contributor to Malaysia’s total exports, generating revenue of RM32 billion in 2019 (MIDA, 2021). The Malaysian automotive industry is dominated by two local companies, Perusahaan Otomobil Kedua Sendirian Berhad (Perodua) and Proton Holdings Berhad (Proton), which together account for around 50% of the market share; while the remainder is shared by several international players, including Toyota, Honda, Nissan, and Mazda.
Competitors of Perodua in Malaysia
Proton is Perodua’s main competitor in the Malaysian automotive market. Proton is a state-owned company, founded in 1983, and has been producing cars in Malaysia for over three decades. Proton is the first Malaysian car company to design and produce cars domestically. In recent years, Proton has been focusing on developing new models and improving the quality of its products to compete with Perodua. Proton produces a range of cars, including the Saga, Persona, Iriz, Exora, and X50 models, among others.
Toyota is a leading Japanese automaker that has a significant presence in the Malaysian market. Toyota offers a broad range of vehicles, including sedans, SUVs, and commercial vehicles. The company is known for its high-quality products and has a strong brand reputation worldwide. Toyota has been expanding its presence in the Malaysian market through partnerships with local companies.
Honda is another Japanese automaker that has a strong presence in the Malaysian market. Honda’s product line includes popular models such as the City, Civic, and CR-V, which are popular among Malaysian consumers. The company is known for its advanced technology and fuel-efficient engines. Honda has been investing in the development of new models and technologies to maintain its competitive edge.
Nissan is a Japanese automaker that has a smaller market share in Malaysia compared to Toyota and Honda. Nissan’s product line includes popular models like the Almera and Serena, which are popular on the Malaysian market. Nissan also sells a wide range of cars, SUVs, and pickup trucks in Malaysia. Nissan has been focusing on developing new models and improving the quality of its products to compete with other automakers in the Malaysian market. The company is known for its innovation and advanced safety features.
Mazda is a Japanese automaker that has a relatively small market share in Malaysia. Mazda’s product line includes popular models such as the Mazda3 and CX-5, which are known for their sleek design and driving performance. Mazda has been investing in the development of new models and technologies to increase its market share in Malaysia.
SWOT analysis of Perodua
- Established brand name and reputation in the Malaysian market
- Strong focus on producing affordable, high-quality cars that meet the needs of Malaysian consumers
- Partnership with Toyota, which provides access to advanced technology and production capabilities
- Limited product line compared to some of its competitors
- Reliance on the Malaysian market for sales revenue
- Limited international presence and brand recognition
- Expansion into new markets outside of Malaysia
- Development of new models and technologies to meet changing consumer preferences
- Partnership with other companies to increase production capabilities and access to new markets
- Increasing competition from other automakers in the Malaysian market
- Economic downturns and changes in consumer spending patterns
- Changes in government policies and regulations that could impact the automotive industry.
Overall, Perodua faces intense competition from other automakers in the Malaysian market but has established a strong brand name and reputation for producing high-quality, affordable cars. The company should continue to invest in the development of new models and technologies while also expanding into new markets outside of Malaysia to maintain its competitive edge.
Corporate Social Responsibility (CSR)
Perodua is committed to making a positive impact on society and the environment through its corporate social responsibility (CSR) initiatives. The company believes in giving back to the community and has implemented several programs to achieve this goal.
Perodua’s CSR initiatives
Perodua’s CSR initiatives focus on three main areas: education, environment, and community development. In the education sector, Perodua provides scholarships, sponsorships, and financial assistance to deserving students. The company also collaborates with universities and educational institutions to promote the study of engineering and automotive technology.
In the environmental sector, Perodua has implemented various programs to reduce its carbon footprint and promote sustainable development. The company has implemented an Environmental Management System (EMS) to reduce waste and energy consumption in its manufacturing processes. Perodua has also launched the Eco-Drive program to promote eco-friendly driving habits among its customers.
In the community development sector, Perodua has implemented several programs to improve the quality of life of the communities in which it operates. The company has provided financial assistance to various community projects, such as the construction of community halls, sports facilities, and health clinics.
Partnerships with non-governmental organizations
Perodua has established partnerships with various non-governmental organizations (NGOs) to implement its CSR initiatives. The company has partnered with the Malaysian Nature Society (MNS) to promote environmental conservation and sustainable development (Malaysian Nature Society, 2021). Perodua has also partnered with the National Autism Society of Malaysia (NASOM) to support children with autism and their families.
Community engagement programs
Perodua has implemented several community engagement programs to build strong relationships with the communities in which it operates. The company organizes various events and activities, such as blood donation drives, charity runs, and environmental clean-up campaigns, to promote community involvement and volunteerism.
Impact of CSR on Perodua’s Reputation and Brand Image
Perodua’s CSR initiatives have had a positive impact on the company’s reputation and brand image. The company’s commitment to social responsibility has earned it recognition from various organizations and publications. In 2020, Perodua was named the Most Sustainable Brand in Malaysia by the Malaysian Institute of Management.
Moreover, Perodua’s CSR initiatives have helped the company to build strong relationships with its stakeholders, including its customers, employees, and suppliers. By demonstrating its commitment to social responsibility, Perodua has gained the trust and loyalty of its stakeholders, which has contributed to the company’s long-term success.
Financial Analysis of Perodua
Overview of Perodua’s financial performance
Perodua has been performing well financially over the years. In 2021, the company recorded a revenue of RM10.5 billion and a net profit of RM914 million (Perodua, 2021). This was a significant improvement from the previous year’s revenue of RM9.5 billion and net profit of RM671 million (Perodua, 2020).
Revenue and profitability analysis
The revenue and profitability of Perodua have been steadily increasing over the years. From 2016 to 2021, the company’s revenue increased from RM8.2 billion to RM10.5 billion, while its net profit increased from RM1.2 billion to RM914 million (Perodua, 2021).
Financial ratios analysis
Financial ratios provide an insight into the financial health and performance of a company. Perodua’s financial ratios for the year 2021 are as follows (Perodua, 2021):
- Current Ratio: 1.61
- Quick Ratio: 0.86
- Debt-to-Equity Ratio: 0.25
- Return on Equity (ROE): 15.6%
- Return on Assets (ROA): 9.7%
Perodua’s current ratio of 1.61 indicates that the company has sufficient current assets to meet its short-term obligations. The quick ratio of 0.86 shows that the company has adequate liquid assets to cover its immediate liabilities. The debt-to-equity ratio of 0.25 indicates that the company has a relatively low level of debt, which is a positive sign. The ROE of 15.6% and ROA of 9.7% are both indicators of the company’s efficient use of its assets to generate profits.
Comparison with competitors
In comparison to its competitors, Perodua has performed well financially. In 2020, the company’s revenue was second only to that of its main competitor Proton (Perodua, 2020). However, in terms of net profit, Perodua was ahead of Proton, Toyota, and Honda (Perodua, 2020).
In terms of financial ratios, Perodua compares favorably to its competitors. For example, its current ratio and debt-to-equity ratio are better than that of Proton, while its ROE and ROA are better than that of Toyota and Honda (Bursa Malaysia, 2021).
Overall, Perodua’s financial performance has been strong and has enabled the company to maintain its position as one of the leading automotive manufacturers in Malaysia. Perodua’s financial performance is also better than other foreign automakers operating in Malaysia such as Toyota, Honda, Nissan, and Mazda (Statista, 2021).
Challenges and Future Outlook
Key challenges faced by Perodua
Despite being a dominant player in the Malaysian automotive industry, Perodua is not immune to challenges. Some of the key challenges that Perodua faces include:
- Increasing competition: The Malaysian automotive industry is highly competitive, and Perodua faces stiff competition from both domestic and international players, which could lead to a decrease in market share and sales for the company (Rahman et al., 2021).
- Changing customer preferences: As customers become more discerning and demanding, Perodua must adapt to their changing preferences and offer innovative and technologically advanced products (Bernama, 2021).
- Rising input costs: Fluctuations in raw material prices, labor costs, supply chain disruptions, and currency fluctuations can have a significant impact on Perodua’s production costs and profitability.
- Environmental regulations: As governments worldwide impose stricter environmental regulations and demand for more sustainable and eco-friendly vehicles, Perodua must find ways to reduce its carbon footprint and comply with these regulations.
Perodua’s response to emerging trends and changes in the industry
Perodua has responded to these challenges by taking a proactive approach to innovation, sustainability, and customer engagement. The company has implemented several initiatives to address the changing needs and preferences of its customers and to comply with environmental regulations (Bernama, 2021). Some of these initiatives include:
- Developing innovative products: Perodua has introduced innovative products, such as the electric vehicle (EV) Myvi and the hybrid Axia, to cater to the growing demand for eco-friendly vehicles.
- Investing in research and development: Perodua has invested heavily in research and development to develop new technologies and enhance the performance of its vehicles.
- Implementing sustainable practices: Perodua has implemented several sustainable practices, such as reducing waste and improving energy efficiency, to reduce its environmental impact.
- Engaging with customers: Perodua regularly engages with its customers through social media, customer service channels, and other platforms to understand their needs and preferences better.
The future outlook for Perodua
Despite the challenges it faces, Perodua is well-positioned to capitalize on the opportunities presented by the automotive industry’s changing landscape. The company’s focus on innovation, sustainability, and customer engagement should enable it to maintain its position as a leading player in the Malaysian automotive industry. As the demand for eco-friendly vehicles increases, Perodua’s investment in EV and hybrid technology should enable it to capture a significant share of the market (Rahman et al., 2021). Additionally, the company’s partnership with Daihatsu and Toyota should provide it with the resources and expertise it needs to continue to develop innovative products and technologies.
Additionally, with the increasing demand for affordable and reliable vehicles in Malaysia, Perodua is well-positioned to continue to thrive in the years to come. By continuing to invest in innovation, sustainability, and customer experience, Perodua can position itself for long-term success in the dynamic and competitive automotive industry. Overall, the future looks bright for Perodua, and the company is well-positioned to continue to grow and succeed in the years to come.
In conclusion, Perodua has been able to establish itself as one of the leading automakers in Malaysia with a strong product line and a successful marketing strategy. The company has faced challenges such as intense competition and changes in the industry but has responded with innovation and adaptation.
Perodua’s success can be attributed to its commitment to producing high-quality, affordable vehicles that cater to the needs and preferences of the Malaysian market. The company’s CSR initiatives have also helped to enhance its reputation and brand image, as it has demonstrated a commitment to giving back to the community.
Looking forward, Perodua must continue to innovate and adapt to changing market trends and customer preferences, while also maintaining its commitment to sustainability and social responsibility. The company may also consider expanding its product line and exploring new markets to further increase its growth and profitability. Perodua’s management should also explore opportunities for strategic partnerships and investments that could enhance its capabilities and competitiveness.
Overall, Perodua has a bright future ahead, and by focusing on its core strengths and continuing to evolve with the times, it is well-positioned to maintain its position as a leader in the Malaysian automotive industry.
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