Is Proton Still Relevant To Malaysians?
Malaysia’s national carmaker is finding it increasingly difficult to attract local buyers but does it mean they’re in permanent decline?
Many Malaysians have a colourful history with Proton and it has to be said not all of it’s bad. When the original Proton Saga was launched on 9th July 1985 the feeling of national pride was palpable throughout the country. We had become a car-producing nation and it would be our springboard towards becoming an industrialised nation. Where are those dreams now?
In 2002, Proton sold 214,985 vehicles and accounted for 49.43 per cent of total vehicle sales in Malaysia. In 2012, despite Malaysia having a TIV (Total Industry Volume) of 627,753 units (up from 434,954 in 2002) Proton sold just 141,121 vehicles, which accounted for a market share of just 22.5 per cent. In contrast, Perodua sold 189,137 cars for over 30 per cent of the overall market while Toyota continued to grow with 105,151 sales. Incidentally, the Japanese brand managed just 27,355 sales in 2002 with 60 per cent of those being commercial vehicle sales.
No matter how you look at them, the numbers make for some pretty grim reading. Despite having 28 years of history behind it Proton is still heavily reliant on the Malaysian car buyer, as export numbers remain tiny. In 2012 only about 20,000 Protons were sold outside of Malaysia in 55 countries, which makes them a tiny niche brand in most markets.
Proton is aware of its failings and to their credit, are taking considerable steps to reenergise the brand. New owners DRB-Hicom have had a monumental task to clean out old regimes and systems and plan for a better future but one wonders if they’re being overly ambitious. As recently as late June 2013, Proton Chairman Tan Sri Mohd Khamil Jamil stated that their aim was to reclaim sales leadership in Malaysia within two years and sell 500,000 cars a year globally within the next five years.
These are very aggressive numbers and despite a renewed focus on exports, one wonders if Proton will eventually lose the hearts and wallets of Malaysian buyers. Evidence of this already happening is wide spread.
Aside from the continued strength of Perodua, the biggest threat to Proton undoubtedly comes Japanese and Korean brands. The Japanese in particular have taken ASEAN production and localisation to heart coming up with a slew of products at ever-smaller price tags. It started slow but the Nissan Almera got things really rolling in 2012 with a starting price of just over RM66,000. Then Suzuki started locally assembling the all-new Swift and its price dropped to RM65,888 while Honda shocked everyone with the RM74,800 with insurance price tag of the CKD Jazz.
At a stroke cars from Japanese brands were now within the reach of Proton buyers and though there was a still a premium to be paid (a basic Proton Prevé manual starts at less than RM60,000) those who could afford the increased monthly payments were only too eager to jump ship. There in lies the other problem for Proton.
Due to the favourable taxation structures previously employed, for nearly 20-years car buyers with a ‘hard ceiling’ of RM65,000 had little or no choice. If you wanted a new car for that money (and who wouldn’t rather have new over used?) then you had to visit the Proton dealer. More often than not, the buyer also came up against a ‘take it or leave it’ attitude as salesmen could always find a buyer for cars in odd or unfavourable spec.
Put those buyers into a market situation where they suddenly have options and you get an ‘anything but Proton’ attitude. It’s not that Malaysians are anti national cars, anti-Proton or even pro-Japanese but having been force fed a steady diet of Protons and Peroduas for decades, most just want to buy from a different brand and now they have a chance to do so.
That being the case, some may wonder why Perodua isn’t in the same predicament and the simple answer is that they are in the very lowest levels of the market where cars are bought as basic transport. Its also clear Malaysians have a more favourable opinion of Perodua, which is probably due to the Toyota/Daihatsu spin-offs they sell. It’s a sad admission to make but the very best Proton cars have always been those that were re-badged efforts rather than something they designed in-house.
Which brings us back to the main question. Is Proton still relevant to Malaysians? For the first half of 2013, Proton sold 64,782 cars in a market that grew 4.1 per cent over the same period on 2012. There is a new Prevé hatchback due in September this year, which should help create some extra excitement for the brand but it’s also clear to see sales are on downward slope. Instead of claiming market leadership in two years, we could see Proton replaced by Toyota as the second most popular brand in Malaysia. Unless something happens soon, there is no real way out of the predicament, which is a shame because back in 1985 my heart filled with Malaysian pride whenever I saw a Proton Saga.
