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Corporate  |  FEBRUARY 15, 2013 12:02PM

Revving up Proton’s image part of turnaround, says Dr M

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Proton City Tanjung Malim

Bernama — Improving the national car quality and rectifying past misconceptions will be the main drivers of the proposed turnaround plan drawn up for Proton Holdings Bhd, says former Prime Minister Dr Mahathir Mohamad.

He said the plan, slated to be unveiled by next month, envisages short-term and medium-term solutions to bolster the national car maker’s image, while creating new sales avenues and income streams for Proton.

The turnaround plan would also see Proton paying more attention to its export market as the car manufacturer was now well aware that the domestic automotive market was getting “over-crowded” year-by-year, said Mahathir, who is also Proton’s advisor, to Bernama in an interview.

Admitting that better quality comes with a higher price, Mahathir said Proton was at a crucial juncture as it has to produce globally-competitive cars to compete with foreign car companies which formed a significant portion of Malaysia’s total automotive industry volume.

“We cannot be always producing cheap cars. If that is the case, we will lose the confidence of Malaysians as it is a general view that cheap cars do not come with quality,” he said. Expressing confidence in Proton’s new owner, DRB-Hicom Bhd, Mahathir said the conglomerate was committed to boost the image of the national car company from merely a local company to a global and well-respected car maker.

Mahathir said the mentality of Malaysians that local cars are inferior in quality when compared with foreign-made cars must be changed. “Malaysians must understand that Malaysia is not the sole market for foreign car makers, which is in contrast with Proton. Proton relies more on the domestic market. “Foreign car manufacturers’ overhead costs are very low.

The money they are making here (in Malaysia) are mostly regarded as profit. “That is why these companies can afford to offer discounts of up to RM10,000 during festive seasons, prompting locals to opt for foreign cars instead of the national car,” he said. Concerned over the “over-crowding” domestic market, Dr Mahathir said Proton had concrete plans to execute its export strategies in efforts to rake in higher earnings to the national car maker through an enhanced income stream.

The total industry volume (TIV) registered a sales of 627,753 new vehicles last year while the number is expected to swell to 640,000 this year. Proton and Perodua made up slightly more than 50 per cent of the TIV while foreign models made UP the other half.

Proton, a brainchild of Dr Mahathir, was established in May 1983. Early last year, DRB-Hicom bought a 42.7 per cent stake in Proton for RM1.29 billion from the government’s investment arm, Khazanah Nasional Bhd, and subsequently took the national carmaker private.

Prior to the takeover, Proton has already executed its turnaround plan. However, with new shareholders and a new top management team, the plan was revisited.

— BERNAMA



 
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