Being fair to Proton (Pt II)

Proton badge, present day

Proton badge, present day

Proton is moving into a new era on the matrix of quantity-quality. Both, in the context and perspective of the corporation which started from the national car project and the brand of a Malaysian made car.

The opportunity arises from the take over and under the control of the present DRB-Hicom leadership and management, which managed to turn around, restructure, add value and expand in the activity thrusts, operational growth and market capitalisation since been under the Al Bukhary Group beginning in 2006.

The rationalisation and realisation of assets, resources, competency, strength and current market potential and opportunities, Proton would embark into even bigger growth. It is committed into production of 500,000 units by 2018.

Several strategies have been outlined. It starts with beefing the customer experience, improving and offering variables in packages and marketing campaign and continuous expansion of existing market from the rationalisation of qunatity and quality at branches and dealership level. Proton is very serious and committed in attacking to the Malaysian motoring consumer market.

The quality of current and upcoming products would be determined from the supply chain and vendor programs. More emphasis would be given on materials, component and built quality. This would complement the customer experience strategy.

Technology benchmarking would part of the product definition.

The action plan outlined for moving forward is Proton is within internal resources  systematically working its way out of the comfort zone and depend lesser of protectionism but instead focus on the business acumen and commercial forces.

“We would like to shout less but do more”, remarked Deputy CEO and COO Dato’ Lukman Ibrahim. “We would be redeeming on our previous domestic market and fully realise its potential, offer value for money products and market oriented. We would also capitalise on the brand loyalist and loyalty”.

Speaking to BigDogDotCom recently, Lukman got his plans outlaid and being rolled out.

“Give us twelve months. You would see the results”.

The confidence is easily substantiated. Proton has developed the platform, seen in the Preve and Suprima S models. Recently, it acquired the NE01 engine from Petronas, which was developed from their experience and technology derived from Sauber. Product development would based on the commonality.

Export market is very much into its sight. Proton would embark into ‘fit-for-purpose’ strategy for different export markets. In some emerging markets, it is building strategic collaboration which include making selected Proton models made available as CKD.

It is not far fetch to see Proton seriously  is having the domestic market of China and India in its sight. Proton is fully realising from an earlier strategic collaboration and partnership.

On Lotus, the brand is moving on a very encouraging direction since the management changeover. Presently, Lotus is experiencing a backlog of 600 cars. Proton is targettng the annual demand for Lotus is 10,000 units by 2018. That is minus the market from China.

Part of the rationalisation of resources is to optimise Lotus’s design team, in Norwich, United Kingdom and Ann Arbor, Michigan. The experience and exposure, coupled with the Petronas NE01 engine design and development team (brought into Proton when the engine was acquired), would be synergised together with Proton’s design and development team which already proven their mettle in products such as Waja, Gen-2, Persona, Saga BLM, Preve and the most recent, Suprima S.

Proton is probably looking to introduce an SUV either being developed or under the Lotus brand by 2018. There is a huge potential for this segment in emerging and growing markets such as China, India and West Asia.

It is within sight that Proton would be fulfilling the export market outlined by NAP 2014 far ahead of the 2020 target. If by then the export number is 100,000 units and  average realised value per unit is RM50,000.00, Proton would add RM 5 billion per annum into Malaysian export value every year.

*Updated by Noon

Published in: on January 28, 2014 at 06:30  Comments (14)  

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14 CommentsLeave a comment

  1. Good to hear that. Any word on the quality improvement?

    • Thank you

      They say proof in the pudding is in the eating.

      Proton is encouraging potential consumers to try for themselves what products are offered in any of the Proton Edar branches or dealers. Test drive cars are made available in all.

      They have to experience for themselves all, before deciding to come back to Proton. Proton’s strategy to win back in the market is from consumer experience and confidence in the products and brand and not about their past.

      This is the new approach to win back confidence of the market.

  2. Big Dog,

    I understand your patriotism and support for a Malaysian-made car and I commend you for standing by the product,

    From what little I know of the Malaysian car industry, I am told that the manufacturing cost of an average Proton is ridiculously over-priced due to massive inefficiencies in the supply chain, in labour costs, warranties, etc.

    The figure quoted to me to make an average Proton is supposedly RM45,000!!

    Apparently, other manufacturers like Toyota, Hyundai can make some of their models for less than RM15,000.

    It’s all well and good to develope new products BUT controlling costs is just as crucial.

    If you do write a Part III to this, I hope you will be able to provide some information on the above.

    Thanks🙂

    • Thank you.

      We are not sure who you hv been speaking to and whether or not in comparison to certain labels being assembled in Malaysia but the information you offered is grossly inaccurate. Obviously you dunno much about the industry.

      If you hv more sense, there is such thin as ‘economies of scale’. It means unless Hyundai is assembling cars in Malaysia in bigger quantity compared to Proton, it is unlikely they can be supplied with components which is very much cheaper per unit cost.

      These brands which you quoted that could be made less than RM15,000 is evidently clear that you don’t understand how the pricing work, especially when apple-for-apple equipment and trim level is being compared.

      Please don’t litter the comment section with your nonsense thoughts. If you continue to share thoughts and hoping to start a debate with fallacy and basis which is far from accurate, then we here would have no choice but withdraw your privilege to do so.

      Please take this seriously.

      Good bye

      • Well done, BD. Good to shoot the SOG down and teach him a few lessons.

        The bloke simply wants to distract and put in red herrings on a discussion regarding the good efforts made by Proton, competing with those much longer in the industry, their products well tested and proven longer in the market. Making unacceptable and illogical comparisons, etc.

        I’ve checked and he has not responded to the counter-comments I bashed him with in the previous post. Good riddance to disruptive and destructive detractors – the DAP kind.

      • Maybe so, but could Proton have stood on it’s own from Day 1 without government protection and/or subsidies?

        And is the automotive industry a “make or break” sector for the Malaysian economy?

        Is the local automotive supply chain good enough to sell it’s products to other car manufacturers besides Proton? I can’t find the statistics to justify the claims of a strong export market for the local supply chain.

      • And what is this Zoltan bloke trying to say? Talking about Proton subsidies as if Proton didn’t deserve them. And what is the bugger’s intention in raising that issue anyway?

        He appears trying to run down the relatively new, fledgling Malaysian car industry. When he could have come out with suggestions on how to improve the industry, he simply rams down such shit as implying the local automotive supply chain is not good enough to sell it’s products to other car manufacturers and questioning the strength of the export market for the local supply chain, whatever.

        What a stupid idiot is that.

      • High technology heavy industries like building a national car project requires a lot of CAPEX.

        Only governments are able to commit something strategic like this.

        There is no sin of protectionism policies. Tariffs and non tariff barriers are necessary to ensure indigenous products maintain market share, as strategic objectives are slowly met.

        The fact is that without Proton, 360 vendors within the Malaysian automotive eco-system would hv not survive. Look at automotive vendors and how they hv benefitted from Proton, the past 25 years or so.

        Please forget about the assemblers for imported brands. They are just interested to make money and the import manufacturers are those which win the most in this automotive assembly game.

        In the right context and perspective, protectionism policy or even act of Parliament is very necessary if not strategically beneficial. Otherwise, Petronas wouldn’t be where it is today.

        Otherwise, CAPEX would be needed to grab control of specific corporations in industries where it is the nation’s lifeblood. It was Federal Government’s money which was used to do the ‘Dawn Raid’ to take over Guthrie on 7 Sept 1981.

        Look where is Sime Darby today and how Malaysia and Malaysians benefitted, thirty years later.

        Isn’t this ‘Dawn Raid’ an even more aggressive ‘protectionism policy’?

      • Well, Zen – it’s obvious that you don’t subscribe to the philosophy of Tony Abbott. Among other things (including standing up to Indonesia) – no more government subsidies for car manufacturers in Australia. So much so that GM has decided to close it’s plants in Australia and Toyota is reviewing it’s manufacturing operations there.

        Are Australians any worse off if there is no domestic car industry?

        The short answer is that they are not.

        If you believe in the creative-destructive aspects of the free market, industries and companies should be allowed to close down if they can no longer pay their way, and if they are on a life-support system of publicly-funded subsidies.

        Are Switzerland, Singapore or Hong Kong any worse off because they don’t have a domestic car manufacturing industry?

        Their consumers have the flexibility and freedom to choose the best in cars and automotive technology worldwide.

        Incidentally, what is Proton’s market share in Singapore, compared with Toyota, BMW, Mercedes-Benz and Volkswagen?

      • Zoltan,

        What’s so great about “the philosophy” of Tony Abbott? Who is he anyway – a world renown economist?

        Ever realized that the US Democrats and Republicans recent nonsense led to even the US Government shutting down? That’s differences in “philosophy” for you, stu.

        And if Australians are not worse off without a domestic car industry, who the hell cares? Are you a permanent resident there? If so, shut the hell up about Proton as you have absconded/ migrated from this country.

        And who says the so-called “creative-destructive aspects of the free market, industries and companies should be allowed to close down if they can no longer pay their way” is the best way? Didn’t read about the US bailing out banks, car manufacturers etc in their recent economic crisis? You been living in the outback in Australia, no newspapers, no TV?

        In economics. like in practically everything else, one man’s meat is another man’s poison. You subscribe to Anwar Al Juburi’s “I won the popular vote, let’s demo”? And his meat is in the arse.

        And why ask about “Proton’s market share in Singapore, compared with Toyota, BMW, Mercedes-Benz and Volkswagen”? Didn’t read about the tiny island – only 30 km across at its longest – not encouraging car ownership? Who the hell wants to spend money promoting cars under such a Government policy? Ever heard of “target market” that Singapore may not be one?

        You criticizing Proton just for the sake of criticizing, eh? I’ve got loads more to hit you with but refrain from doing so in view of the coming Chinese New Year and you sound Chinese.

  3. Critics of Proton must consider the fact is that Malaysia is one of the exclusive ‘Club of Dozen’. Apart from US, UK, France, Germany, Italy, Spain, China, South Korea, Japan, India and Republic Czech, no other nations design and build their indigenous cars.

    That’s the commitment of people in Proton the past 30 years.

    The info about where Lotus is heading is very refreshing. Imagine where Proton will be in five years time. More of Lotus would be imbedded in Proton models.

    That would ascertain Proton as a brand being at par if not better than Japanese and South Korean makes.

    I’m very bullish that like Petronas, Proton would be another nation’s pride.

    • I think Russia also designs its own cars although you may be correct as Lada did say they will stop production not sure if this means no other cars are built in Russia.
      You are right though Malaysia is in an exclusive car club and should be proud of that

    • Thank you.

      Lets say, by 2020 Proton did realise this capability of export markets with 100,000 units of mixture between CBU and CKD models. That is RM 5 billion per annum of forex.

      An annual 10% growth, factored with ‘market adjustments’ and inflation, by 2030 the annual export would be in the neighbourhood of RM15-16 billion per annum.

      Imagine the eco-system which would hv been created by a manufacturing industry with indigenous products coupled with superior British racing technology.

      One would be looking an aggregated export value RM80-90 billion by 2030.

      Wouldn’t that be encouraging?

  4. Hi B.D.,

    Someone from Kota Kinabalu with the IP address ‘124.82.124.79’ replaced the Proton badge/logo on the Proton Wikipedia page with a URL to this article.

    I’m unsure who he or she is, nor his or her motives, but I’m happy to have stumbled across this article, all the same.

    I would like to say, first & foremost, that both Part 1 and 2 are reasonably well-written. But more importantly, I’m happy to see a talented Malaysian who takes pride in Proton. Malaysia needs more citizens like you.

    I am User:Aero777 on Wikipedia, and I’m responsible for the vast majority of edits to the Proton Wikipedia pages. I also created the ‘sales charts’ that you’ve kindly used in Part 1.

    If anyone here would like to provide feedback or request anything to be added to the Proton Wikipedia pages, please let me know. I am committed to raise awareness on Proton’s achievements, and Wikipedia serves as a powerful catalyst to that objective.

    If anyone here would like to contribute to Wikipedia (writings, photos of Proton cars etc.), please feel free, your efforts will be greatly appreciated. It is very unfortunate that only a handful of Malaysians are willing to take the time and effort to ‘give back’ to Wikipedia, especially so seeing that we all access Wikipedia every now and then.

    I’m sorry for this long essay. I just wanted to share my appreciation. Keep up the good work B.D. !


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