Factors that affect consumers' Purchase of cars in Malaysia towards the implementation of Asean Free Trade Zone Agreement (AFTA) / Faizah Mashahadi and Sharifah Heryati Syed Nor

Sale of imported car has been increasing since 2000 even before AFTA were fully implemented. Market share of imported car was 25.9% in 2003 as compared to only 19.6% in 2000. It is an indication that Malaysians are slowly switching their preference for imported cars. With the implementation of AFTA, it is expected that prices of cars will decreased due to the reduction in tariffs. This paper studies the effects of AFTA on consumers' buying patterns towards local and imported cars. The focus is mainly on the consumers' current expectation of local car, current purchasing pattern, and their purchasing behavior after the implementation of
AFTA. The identification of important factors that will influence the consumers' buying pattern is given special attention. A survey was conducted to collect relevant data and self-administered questionnaire was used to record the responses of the target group, the car buyers.
The questionnaires were randomly distributed to 150 respondents and 134 were completed and subsequently used for the study. The data were analyzed using selected descriptive statistics, and factor analysis. Factor analysis was used to find the factors which affect the purchasing patterns of car by consumers. The study found that attribute of the car to be the most important factor in shaping consumers' current expectation of cars and their purchasing pattern. The same factor will affect the purchasing pattern the implementation of AFTA. Based on the results, local car manufacturers should focus on a few areas after AFTA. They include: (i) providing excellent maintenance and repair services to the consumers, (ii) conducting R&D so as to provide up-to-date attributes of cars they produce, and (iii) continuously study consumers' tastes and preferences so that they can be included in designing new car models.