Proton returns to success with the X70 this year

The national carmaker is now on track to clinch the 2nd position in overall sales

by RAHIMI YUNUS/ pic by TMR FILE

PROTON Holdings Bhd has managed to silence its critics and naysayers throughout 2019 when it made a strong comeback as one of the powerhouses in the automotive sector, despite a rather challenging market.

The national carmaker is now on track to clinch the second position in overall sales after delivering a record number of cars for the 12-month period.

“Proton’s rise this year was driven by the X70. The company also offered better pricing, technology and design of the facelifted variants, namely Saga, Persona, Iriz and Exora,” Kenanga Research analyst Wan Mustaqim Wan Ab Aziz told The Malaysian Reserve (TMR).

Analysts also agreed that the national carmaker’s success could be attributed to its better quality models, in terms of design and technology, as well as the models’ competitive prices.

Proton launched four facelifted models this year, Iriz, Persona, Saga and Exora, with improvements in design and technology.

The flagship SUV, the X70, remains the automaker’s biggest achievement of the year with strong sales, improving the consumer’s perception of Proton.

As of November, the national carmaker sold 89,476 vehicles, up 50.1% year-on-year (YoY) for a market share of 16.2%.

The company’s volume doubled to 9,643 units last month, driven by strong demand in Saga.

Proton has delivered more than 4,000 units of Saga per month for three months consecutively since its launch in August, pushing the model to the top of A-segment sedans with 34,422 units sold thus far in 2019 at a growth of 32%.

The X70 SUV, which approaches its first anniversary since the launch in December last year, is expected to spearhead the national carmaker’s growth in the coming years.

“The X70 has been our biggest success story for 2019. It enabled Proton to enter a new segment with zero market experience and a year later, we have emerged as the undisputed sales leader.

“The uptrend shows that customers are still interested in the most intelligent SUV on sale and we target to grow that interest in the coming year,” CEO Dr Li Chunrong said in a statement recently.

Li previously said the company is on track to break even this year and set to become profitable in 2020, contributed by bigger sales volume.

AllianceDBS Research Sdn Bhd analyst Abdul Azim Muhthar said carmakers with SUV offerings would gain from the rising demand of the models.

“I think more consumers are switching from passenger cars and MPV to SUV. Those that have high exposure in the SUV segment are in a better position to compete and outperform others,” he told TMR.

Meanwhile, Wan Mustaqim said Proton’s turnaround programme has yielded results after the partnership between DRB-Hicom Bhd and Zhejiang Geely Holding Group Co Ltd.

“The new management strategy to gradually reduce suppliers’ cost, whereby the cost savings are passed down to offer lower prices, and strive for better quality as close to the standards of Geely’s plant in China, has borne fruits. Consumer sentiment is improving and thus reflected in sales number,” he said.

Proton is on course to settle in the No 2 position based on volume this year after a four-year absence, edging out Honda Malaysia Sdn Bhd in an increasingly competitive market.

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is expected to stay at No 1 rank with last reported number was over 201,000 units sold as at October.

Perodua and Proton have dominated the local automotive market with huge positive growth, while foreign rivals slump as demand shifts to a lower price segment.

Foreign car manufacturers’ sales volume in the first nine months (9M19) dropped by 18% YoY as national makes gobbled up a bigger market share.

Non-national carmakers delivered about 43,200 fewer vehicles to 194,300 units in 9M19, compared to 237,500 in the corresponding period in 2018, according to Affin Hwang Investment Bank Bhd’s estimates and data from the Malaysian Automotive Association.

In a recent report, Affin Hwang analyst Brian Yeoh said nonnational carmakers captured 43.9% of Malaysia’s automotive market share for the 9M19, down from 52.2% recorded in the same period last year.