Proton vendors must buck up to be competitive, says Mustapa


Proton Holdings Bhd’s vendors have been told to adapt to the challenging market if they wish to remain competitive in the tough automotive sector.

International Trade and Industry (MITI) Minister Datuk Seri Mustapa Mohamed said he is aware of the difficult situation that is currently faced by Proton’s business partners and the government is working on solutions that could mitigate all issues.

“Business is market-driven. Although the government can intervene in order to support the industry at the beginning, vendors would still have to stand on their own feet in the medium and longer term,” he told reporters at MITI’s 2018 Automotive Outlook briefing in Kuala Lumpur yesterday.

Mustapa said the government has been in communication with Proton’s new management and stakeholders to ensure that all matters would be carefully managed to avoid drastic repercussions.

“MITI and the Malaysia Automotive Institute are in regular communication with various stakeholders, and the government will continue to monitor and do what we can.

“It is, however, incumbent on the dealers and vendors to also make improvements.

“Otherwise, it is tough to survive in the increasingly competitive market,” he said.

The Malaysian Reserve reported yesterday that Proton’s new management, under its new CEO Dr Li Chunrong, has set a high bar to its distributors by asking them to upgrade their service and sales centres and place everything under one roof.

According to the report, four dealerships had agreed to upgrade their facilities with Proton, while the other small and medium owners are still struggling to invest and meet the requirement.

Mustapa said with increased customer expectations, it is crucial for any car manufacturer to meet its consumers’ needs.

Meanwhile, the industry outlook briefing presented by Mustapa revealed that energy efficient vehicle (EEV) penetration in Malaysia has increased for its fourth straight year.

Of the total cars on the street in 2017, 52% are in the EEV bracket — surpassing the 50% target set by the government in 2016.

Production of “green-friendly vehicles” also increased from 247,912 in 2016 to 308,807 last year.

“This continuous growth is a signal of growing awareness for EEVs within the Malaysian automotive sphere,” Mustapa said.

Last year also marked the end of the National Automotive Policy that was introduced in 2014.

The new automotive policy is expected to be introduced in the middle of the year.

Mustapa said based on pre-liminary industry data, total industry volume last year is expected to decrease from 580,124 to between 575,000 and 580,000.

Passenger vehicles registered also fell to between 510,000 and 515,000 in 2017, from 545,253 cars registered in 2016.

As for the employment rate, Mustapa said 27,125 new jobs were created in the automotive sector as at December 2017, a 4.93% increase from the 25,850 jobs available in the previous year.

Of the total, 31% are skilled and highly skilled jobs. MITI also projected that 29,641 new jobs would be created this year.

On another note, Mustapa announced that the Malaysia Autoshow 2018 would be held between April 26 and April 29 this year at Malaysia Agro Exposition Park Serdang in Selangor.

Last November, the show recorded more than RM700 million sales during the four-day event.


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