KUALA LUMPUR: Proton's immediate plan would be to change its strategy from being a maker of cheap cars to become a world-standard car manufacturer, said newly appointed chairman Tun Dr Mahathir Mohamad.

The fourth prime minister said Proton has always been labelled as a cheap or poor quality car maker.

"Now Proton wants to produce cars which are of world standard, but you have to pay a higher price.

"You can't have a good car and pay a bad car price," he told reporters when asked about his immediate plan for Proton.

Earlier on Monday, Dr Mahathir, who is Human Life Advancement Foundation (HLAF) chairman, delivered the keynote address and launched the HLAF Annual Award and Workshop at the Putra World Trade Centre (PWTC).

He said when Proton produced the Preve and Suprima car models, which are of good quality but sell for RM80,000, people claimed the price was too high for Proton.

"The next car of the same quality is RM120,000. You (consumers) want to have cheap cars ok, Proton can produce cheap cars," Dr Mahathir said.

Asked if Proton would continue to produce cheap cars, Dr Mahathir replied: "Proton have to make a living. If consumers want cheap cars Proton will make cheap cars, they run three miles and break down."

Responding to a question if Proton has approached the Ministry of International Trade and Industry (MITI) and Petronas for any funds, he said the car maker had never asked for funding.

Asked if he himself as Proton chairman would approach either for funding, Dr Mahathir replied: "No way, because Proton is a private company now and it is able to make progress in research and development."

Dr Mahathir also said the government was now encouraging importation of cars rather than encouraging local industries.

"When you import cars, money flows out and you don't get any technology from them," he added.

Asked if Proton needs government aid, he said former South Korean President Park Chung Hee during his tenure called up 12 individuals and told them they must go into industry and he would provide the loans and funds.

These companies, like Hyundai, LG and Daewoo, were private companies and their government fully helped them, and because of that today they do not need government help anymore, he added. - Bernama

SHAH ALAM: Proton is having a promotion this month ahead of Ramadan and Raya.

It is dangling cash rebates of up to RM8,000 on selected models.

In addition, it is offering 3 years free service and interest rates from as low as 2.70%.

The nationwide promotion ends on June 30.
PETALING JAYA: Proton Holdings Bhd is in for challenging times ahead as it critically needs to develop new technology to remain competitive and win back lost market share, says CIMB Research.

The research house highlighted in a report that the national carmaker’s market share had fallen to 21.2% in 2012 from 26% in 2011.

“Year-to-date April 2014, Proton’s market share slid even further to 19%. Proton needs to address this problem fast,” it said, adding that the company’s upcoming global small car, slated for launch in the fourth quarter of this year, was key to Proton’s “long-term survival”.

“If the model is successful, it will enable Proton to regain some of its market share, buy time for its long-term business plan, and underpin (parent company) DRB-Hicom’s commitment to seriously turn Proton around. Proton just cannot fail with this model.” pro-for-main00.jpg

The research house added that developing new technology on a continuous and consistent basis was also a challenge for Proton.

“Its lack of economies of scale is a major hindrance, as it is not able to bring down the unit price of its vehicles as its development costs are spread across a smaller number of units compared with its foreign competitors, thus resulting in uncompetitive pricing for its vehicles.

“We believe the best way forward is to collaborate with a credible foreign partner to develop its new models,” CIMB Research said.

One industry observer pointed out that Proton needed to further develop its sales network to become more successful.

“A strong sales network is crucial, especially within the automotive industry. Whether the model is good or not, if you don’t have a strong network, you’ll have difficulty selling that product.”

All eyes are also on the carmaker following the appointment of former prime minister Tun Dr Mahathir Mohamad as its chairman last month. The 88-year-old Mahathir has been Proton’s group adviser since the late 2003.

CIMB Research said it was neutral on Mahathir’s appointment as company chairman.

“With his influence and connections, we believe he will be able to help Proton especially in negotiations with policymakers and possible foreign partners.

“However, we believe the problems with Proton are structural problems that go way beyond the top-level management issues.

“As the automotive industry is basically a volume game, Proton is in desperate need to come up with a line of new models with competitive quality and pricing to enable it to regain its domestic market share and penetrate the export markets profitably,” it said.
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