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.
0 comments:
Post a Comment