Is this the start of Proton’s revival?

Buoyed by the sales of the X70 SUV, the partnership with Geely has given a new lease of life to local carmaker

By RAHIMI YUNUS / Pic By HUSSEIN SHAHARUDDIN

Proton Holdings Bhd posted the best sales in the first two months of 2019, its best performance in recent years, and the carmaker has set its sights on wrestling the No 2 position based on total industry volume.

The national carmaker posted 5,283 new car sales in February 2019, a 37% jump compared to a year ago, while the first two months figures showed sales jumped by 42% compared to the same period in 2018. It delivered 6,862 units in January 2019 compared to 5,598 in December 2018.

Buoyed by the sales of the X70 SUV, the about 20 months partnership with China’s automotive titan Zhejiang Geely Holding Group Co Ltd has given a new lease of life to local carmaker.

Analysts are largely optimistic of the carmaker’s sales performance, driven by encouraging sales of the X70  with the first model rolled out from its collaboration with the
China-based automotive giant.

“It looks like the sales momentum is going strong. I think because it is cheaper compared to competitors, but having a Volvo car quality,” Kenanga Research analyst Wan Mustaqim Wan Ab Aziz told The Malaysian Reserve (TMR).

Proton, which is 49.9%-owned by Geely, while DRB-Hicom Bhd holds the balance 50.1%, has been getting astounding success from the SUV which contributed 46% or 5,600 units of the two-month total volume.

Proton has also projected a 30% increase in sales for the facelifted Iriz and Persona, which will hit the market soon.

The national carmaker may also launch another SUV, dubbed the X50, which is a smaller SUV based on Geely Binyue, putting Proton on the driving seat of the industry again.

“I think the market share for the local carmaker should regain strength this year on new models and facelifts,” Affin Hwang Investment Bank Bhd analyst Brian Yeoh told TMR.

Proton CEO Dr Li Chunrong had already expressed his optimism that the company could regain its market share and return to the No 2 position by year-end; and more importantly, to be profitable.

In 2018, Proton’s market share stood at 12.1% with 64,744 units, trailing behind Honda at 19.2% with 102,282 units, according to statistics from the Malaysian Automotive Association.

JF Apex Securities Bhd analyst Nursuhaiza Hashim said the X70 sales momentum provides more room for growth for Proton and the carmaker could grab a bit of market share from Perusahaan Otomotif Kedua Sdn Bhd (Perodua).

As it is, Proton’s X70 and Perodua’s Aruz are competing aggressively in the local SUV market despite both SUVs are from different segments.

“People have started to see Proton as a good brand. The specifications and designs are updated,” Nursuhaiza told TMR.

She added that Proton may consider introducing more smaller cars, not just SUVs, such as those in the B-segment to appeal to more consumers to the brand.

Overall, Li previously said Proton can reach breakeven this year, and is set to be profitable by 2020.

On the export front, Proton is keen to explore new markets, including Pakistan and the Middle East, to boost sales volume beyond Malaysia.

Proton exported 1,388 cars last year, mainly to Asean, an increase from the 248 units recorded in 2017.

To date, the company has 75 new 3S (sales, services and spare parts) and 4S (including body and paint) centres with a new corporate identity to uplift the brand image and improve after-sales service.

Proton is now leading in terms of the number of 3S/4S outlets for any automotive brands in Malaysia. It is putting of pedal to the metal and its revival looks on course.