Assessing the determinants of the Malaysians' demand for automobile and the impact of automobile industry on the Malaysian economy

The Malaysian automobile maker has been heavily protected using various tools since 1985 as the industry is considered to be a. Key industry th.at would stimulate growth. Although Malaysia is a small country with population of about 25 million, the demand for automobile increased tremendously since the late of 1990's. This paper attempts to analyse the automobile demand at macro level using time series analysis approach. The results of the cointegration tests and Vector Error Correction Models suggest that in contrast to the basic microeconomic theory, all of the independent variables are statistically insignificant in influencing the automobile demand in the country.