Proton to Compete with Toyota and Honda

Malaysian automaker which was acquired by Chinese auto giant Geely has reinvented itself in terms of quality and branding, and now it aims to compete with global players such as Toyota and Honda.

Proton CEO Li Chunrong

This was revealed by Proton CEO Li Chunrong in an exclusive interview with Channel News Asia. Li said Proton had previously faced quality issues, however the company has made great strides in this area. The CEO said:

“That (quality issues) was the problem with Proton before, they did not have the resources to (look into quality). But now with the expertise and the resources from Geely as well as the experience of Proton as a national carmaker, we would be able to produce better quality cars. With our new product positioning, our competitors are Honda and Toyota.”

Going ahead, he wants Proton to focus on finer details so that it will shed its impression as a basic car and be more recognized as a ‘high-end’ car brand. This is part of a 10-year plan for Proton, Li added.

Perodua Is Not Our Competitor Anymore

Commenting on Perodua which is currently Malaysia’s number 1 automaker in terms of sales, Li Chunrong said:

“Perodua is not even our competitor (anymore) … Why? Because of different product position”

He said the turnaround efforts over the last 2 years have propelled Proton far beyond its local counterpart in terms of its market positioning. Li claimed:

“Our Saga is much better than their Bezza. The Proton Saga sedan has been recently face-lifted, while the Bezza is Perodua’s first-ever sedan.”

Related: The Revival of Proton & Strong Sales Performance in Malaysia

For many years, Malaysia’s first national carmaker was in the red and reliant on government loans, capital injection, and incentives. In 2017, a 49.9% stake was sold to China’s Geely. Now with Mr Li at the helm, Proton is expected to break even this year and make profits next year.

As for Perodua, it has been ahead of Proton in terms of sales volume. Perodua is known for producing quality small cars for the same price or less than Proton. According to Malaysian Automotive Association’s (MAA) statistics, Perodua sold 22,808 cars in October, while Proton (which has now regained its spot as the second best selling car brand in Malaysia) sold 9,803 cars.

X70 and Saga- Key to Proton’s Turnaround

Li said public trust in the Proton brand was redeemed after the release of the X70 SUV in December last year. Proton has sold 26,000 units of X70 SUV since it was launched. Li added that the facelift of their PIES models also contributed to a renewed image of the Proton brand.

“PIES stands for Persona, Iriz, Exora and Saga. We took 16 months to develop the 5 models (including X70) and we launched all of them in a span of just 8 months, which is number one speed. Following the launch, the new Saga has contributed greatly to the sales of Proton cars. It was selling around 2,200 units per month three years ago, now its selling 4,000 units a month since August, that is double the sales.”

He said the Saga made up 70% of Proton’s sales while the X70 contributed about 19%. Together the duo contributes to nearly 90% of Proton sales.

Increasing Exports to Pakistan and Egypt

On the back of Proton’s rapid transformation, Li said it will seek to become an “international brand” by 2027, in particular by boosting the exports. He noted that Thailand, which produces two million cars annually, actually exports one million units. Li said:

“That is 100% export and take Indonesia for example, their export is at 30%. With Malaysia however, exports are only 3%.”

For Proton, the best export performance was in 2005, when it exported 20,000 units annually. However in 2017, the numbers reduced to 200 cars per year. Why? Because of the product,” Li said.

Proton’s current single largest export market is Egypt, where it is producing left-hand drive Saga and Exora models. In the last two years, Proton has been able to increase its exports to 1,000 units. Li added by saying:

“But that is not enough. Once we launch our upgraded models next year, our exports will increase and our aim is 5,000 cars a year.”

Related: Al-Haj Gets Greenfield Status to Assemble Proton Cars in Pakistan

Li also said that Proton would ramp up exports to Pakistan, where it is collaborating with Al-Haj Automotive to establish an assembly plant– its first in Southeast Asia. The project which is in progress would be executed as part of Proton’s 10-year plan. The company will begin assembling the Saga sedan in Pakistan by mid 2020 while the X70 SUV might be offered as a CBU, exported from Malaysia. Proton intends to launch more models in Pakistan, however for that, Li said more market research is needed.

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