Proton revs up the engine as competitors rattle

If Proton continues on this trajectory, rival automakers will have to keep their eyes on their rear view mirrors as the challenge is on

Pic By TMR

BEING a Proton car dealer these days must be an easier task. The launch of the X70 by Proton Holdings Bhd late last year has been a great success, with buyers snapping up over 30,000 completely built-up (CBU) units. People are allured by the value-formoney proposition.

The SUV has seen Proton’s brand acceptance improving significantly, rattling competitors by rising into the second-biggest market share in the last few months.

A friend at a reputable Japanese brand said his company is seeing weak responses to new launches as potential car buyers are waiting for what Proton plans to introduce next.

These buyers had postponed their purchases, hoping to land a cheaper option for a car in the same class or to get something feature-rich at the same price range.

The new business model at Proton is surely working well. CEO Dr Li Chunrong’s move to go for the SUV market with the launch of the X70 was a show of ambition of its management and shareholders to make a decent margin and establish the brand in the executive class market range.

Clearly, the move has paid off handsomely, with social media already in a frenzy about Proton’s next launch of the X50 — which is expected to hit the market next year. Those who have test driven or bought the X70 are a satisfied bunch.

Good word of mouth has translated into greater sales. The X70 has helped Proton double its market share in the past six months from 10.8% in 2018 to almost 15% year-to-date. The number looks set to grow.

The company in a recent statement said it delivered 7,615 units in June, which propelled its market share of the local automotive market to 18% in a month when the total industry volume is forecast to have shrunk by 30.8% to 42,090 units.

The numbers suggest Proton is now gobbling the market share of others, something the carmaker was a victim of for so long. But now it is the reverse. All is fair in war and selling cars.

Investors were also quick to react with attention on DRB-Hicom Bhd, which holds a 50.1% stake in Proton.

Share prices of the conglomerate, which were battered due to Proton’s past performance, have improved significantly.

The next challenge for Proton’s management will be to build the trust of its buyers that the cars rolled out by its Tanjung Malim facility will be of equal quality with the CBU X70 it sells in the market now.

Proton drivers — past, present and future — would also like to see the company take up a fight in the lower segment with its existing or new models. Proton has been trailing Perodua (Perusahaan Otomobil Kedua Sdn Bhd), so the price points and quality control will be crucial.

We can only hope that the X70, and changes to its dealers and vendors system, has helped Proton to finally bury its past association with poor after-sales service and quality issues.

If Proton continues on this trajectory, rival automakers will have to keep their eyes on their rear view mirrors as the challenge is on.


Bhupinder Singh is the corporate desk editor of The Malaysian Reserve.