Proton X50 delivery dragged by CMCO, overwhelming demand

To date, 3,200 units of X50 have been delivered with outstanding booking for the SUV at 30,000


PRODUCTION of the most anticipated SUV in the country — the Proton X50 — has been hit by the reinforcement of the Conditional Movement Control Order (CMCO), with some customers still waiting to drive home their SUVs since it was launched on Sep 16.

Roslan says as the govt has extended the sales tax exemption, the onus will be on Proton to make those deliveries

Acknowledging the issue, Proton Holdings Bhd sales and marketing VP Roslan Abdullah said the delay is inevitable as its manufacturing side depends on the availability of parts supplied by vendors, who are now struggling due to strict CMCO procedures brought on by the Covid-19 pandemic.

Roslan, who is also Proton Edar Sdn Bhd CEO, said the outstanding booking for X50 now stands at 30,000, which is half of the total outstanding order across all models.

“To date, we have delivered 3,200 units of X50 and are working hard to meet our customers’ expectations to receive their cars as soon as possible.

“We are working closely with our business partners, vendors and dealers to ensure they can still operate smoothly during this challenging period,” Roslan told The Malaysian Reserve (TMR) in a one-hour interview yesterday.

The two-month nationwide MCO in March and April this year had halted manufacturing operations of the automotive sector, including vendors and distributors. The government later eased the restrictions in May and further in June.

However, the Klang Valley — which houses many vast manufacturing players — was put to the test again with another round of the CMCO, which began on Oct 14 and now expected to end on Jan 14, due to the third wave of the coronavirus.

“We have about 60 local vendors for the X50, of which one had to shut down operations as a Covid-19 cluster was detected in the area. “This is affecting the supply chain and we cannot simply make substitutes as we need to maintain the quality promised to the customers,” Roslan said.

He added that due to the closure of international borders, some of the imported parts are also behind schedule, causing further difficulties for the production lines.

As of now, Roslan said Proton is looking to deliver the B-segment SUV for existing orders within the next two months. However, new bookings would take up to three or four months to be delivered, Roslan said.

“Among our concerns are that customers would not be able to enjoy the sales tax exemption under the economic stimulus plan — Penjana (Short-Term Economic Recovery Plan) — which is going to expire on Thursday (tomorrow).

“We forecast some order cancellations if the government does not extend this, but we are also working on a back-up plan to ensure customers who booked their X50 would stick with us until the car is registered.” In June, the government announced relief measures through Penjana, among which was a 100% sales tax exemption on locally assembled models and 50% on fully imported models for passenger cars, starting from June 15 to Dec 31, 2020.

The initiative, which involves a quantum of around RM897 million, was aimed at boosting new car sales and keeping the industry moving, while providing financial relief to new car buyers.

Yesterday, TMR reported that the government has agreed to extend the measure for another six months, according to a letter from the Ministry of Finance.

Roslan said the move is imminent as the automotive industry has a huge spillover effect to the economy and it is important to keep the sector alive during the pandemic.

“When the government announced the scheme in June, we did not hear of original equipment manufacturers complaining about a drop in car sales or business shutting down. Instead, they were recruiting.

“The industry entails a long chain from manufacturing to services, which also helps logistics businesses as well as the banking sector, which provides financial services. It will help to grow our domestic economy.”

Roslan also apologised to the customers who have been waiting for the X50 for months.

“Proton initially only committed to register 4,000 units of the SUV before the year ended. Despite the encouraging sentiment we received before the launch, we did not foresee people queueing at our showrooms to book 5,000 units within just a couple of days.

“It was so unexpected. And for that, I apologise to our customers.” Roslan said as the government has decided to extend the sales tax exemption, the onus will be on Proton to make those deliveries. Among others, he said the carmaker is now “micromanaging” its business partners from vendors to distributors.

“We are closely monitoring this with a daily report on how every vendor and dealer is doing, so we can prove any necessary assistance,” he concluded.

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