Proton

Introduction:

Proton is a Malay acronym for Perusahaan Otomobil Nasional (English: National

Automobile Enterprise).Founded in 1983, it was Malaysia's only carmaker until the

establishment of the secondary national carmaker, Perodua, in 1993.

For more than two decades since its establishment, this stake was jointly owned by

Mitsubishi Motors and parent Mitsubishi Corp. Based on technology and parts

from Mitsubishi Motors, production of the first model, the Proton Saga began in

September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially

the components of the car were entirely manufactured by Mitsubishi but slowly

local parts were being used as technologies were transferred and skills were

gained. The 100,000th Proton Saga was produced in January 1989 and sold in

Malaysia market. The Mitsubishi-Proton partnership had come to an end due to a

lack of technology transfer.

In 1993, a model called Proton Wira was introduced based on the Mitsubishi

Lancer/Colt. More than 220,000 units were sold between 1996 and 1998.[2] Proton

Perdana, based on the Mitsubishi Galant/Eterna, was first produced in 1995,

intended for higher end market.

The Proton Waja (Proton Impian in UK), launched early 2001, is the first car

model designed internally by Proton.

With the acquisition of Lotus technologies in 1996 from ACBN Holdings (a

company owned by Volkswagen), Proton gained an additional source of

engineering and automotive expertise. This led to the production of Proton Gen-

2 that was code-name Wira Replacement Model (WRM) before its launch.

In 2012, Proton will be launching its first global car, Proton Prevé (code name

known as Proton P3-21A) on April 16 [5].

Proton has exports cars to the United Kingdom, South Africa, and Australia and the company is

aggressively marketing its cars in several other countries including the Middle East. Besides that,

Proton cars has also been exporting a small volume of cars to Singapore, Brunei, Indonesia,

Nepal, Sri Lanka, Pakistan, Bangladesh, Taiwan , Cyprus and Mauritius. 14,706 Proton cars

were exported in 2006. Recently Proton returned to Guangdong, China, where it did business in

the past but withdrew after having poor sales record. In July 2007, Proton signed an agreement

with Youngman Automobile Group Ltd. Co., paving the way for the national carmaker to offer

its products and services in China. Under the agreements,Youngman will import 30,000 Gen.2

CBU (completely built-up) units and resell them under its own EuropeStar brand and eventually

develop a new range of Made-in-China cars with the engineering services provided through

Proton's Lotus.

Perodua’s supply in the second quarter was limited (due to phasing-out of the old

Myvi) and also the problems caused by the amendments to the H-P Act, it has also

been said that Proton’s current line-up is its strongest ever and have drawn many

customers, largely by its core models Proton Saga and Proton Persona. Proton

delivered 85,223 units to take a 28.7% share of the TIV while Perodua delivered

79,467 units, a difference of 5,756 units.[11]

Proton Holdings Berhad registered a profit before tax of RM186 million in the first

half of its 2010/11 financial year benefitting from the improved market sentiments

and conditions that had accounted for a 13% increase in its vehicle sales. The

growing demand for Proton vehicles were significantly contributed by three core

models; the Saga, Persona and Exora.

Worldwide Operations

Youngman Europestar

Proton exports cars to the United Kingdom, South Africa, and Australia and the

company is aggressively marketing its cars in several other countries including

the Middle East. Additionally, Proton has also been exporting a small volume of

cars to Singapore, Brunei, Indonesia, Thailand, Nepal, Sri

Lanka, Pakistan, Bangladesh, Taiwan, Cyprus and Mauritius. 14,706 Proton cars

were exported in 2006[12] The export units jump to 21,261 in 2009 but fell to

18,769 in 2010 due to global recession. [1]

Proton began its exports from Malaysia to other right hand drive markets like New

Zealand in the late 1980s, but its success was mostly limited to theUnited

Kingdom (a market it entered along with Ireland in 1989). They advertised there

with the slogan Japanese Technology, Malaysian Style. Proton cars proved popular

among budget-oriented motorists, and like Japanese and South Korean models

before them, led to the demise of manufacturers such as the Soviet Lada and ex-

Yugoslavian (now Serbia) Zastava. By the 1990s, Proton had withdrawn from the

New Zealand market after offering only the Saga four-door and Persona five-door

models. The company also exited the Irish market in the early 1990s, following

limited success in that country. The Persona and Natura models were sold

in Chile briefly during the late nineties by a local Nissan importer, but few were

sold and the venture ended after two years.[citation needed]

Proton enjoyed brief success as a few units of the Saga and Wira were exported to

Trinidad & Tobago (Caribbean) during the late '90s where they were used mainly

as rentals. Proton cars were imported into Trinidad and Tobago between 1993 and

2002. They were sold through a local dealer, H.E Robinson Ltd. Only the Saga and

Wira ever reached this market with the Wira enjoying modest sales success. The

bankruptcy of the dealership forced the exit of Proton from Trinidad and Tobago in

2002.

Proton also produces models in left-hand drive, for export to continental Europe.

An entry into the United States market was considered by Malcolm

Bricklin following Hyundai's successful launch in the mid 1980s. However,

exports to the U.S. never materialised.

[edit]United Kingdom

Proton sales seem to be slowly declining in the United Kingdom with 2008 sales at

1518 (0.07% share of the market), compared to 2752 in 2002. These figures are

insignificant compared to 2008 UK sales of 28,036 for South Korea's Hyundai and

29,397 for Spain's SEAT. In 2009 Proton's UK sales fell further and the marque

sold only 960 cars with a reduced 0.05% market share. [2]

In the United Kingdom, Proton cars suffer somewhat from a poor public image;

they are considered poor quality products with very poor residual values compared

to other cheap Pacific Rim cars from Kia, Chevrolet and Hyundai. In 1998 Proton

attempted to change this by introducing the Proton Satria GTi - however, the car

was somewhat out of reach to younger drivers due to high insurance premiums (the

car was originally a group 16 and was reclassified in 2001 to group 14 but this still

resulted in high premiums). The Satria GTi also sported a "Lotus Ride &

Handling" badge which, coupled with an average security system, made it

attractive to thieves.

However, the vehicle was a success as far as handling was concerned which meant

that, coupled with its 1.8 16-valve Double Overhead Cam engine (which produced

133 bhp) a number were purchased by Octagon Race Circuits and used as track

cars at Silverstone and Brands Hatch racing circuits. Proton’s current line-up

includes the 5-door Savvy city car, the 3-door Satria Neo and new Satria Neo

Sport, 5-door GEN.2 family hatchback and the 4-door Gen•2 saloon and LPG dual

fuel Gen•2 ecoLogic range.

[edit]ASEAN countries

The model that Malaysia has followed with the formation of Proton may be used as

a case study for rent seeking as tariffs on imported cars rose almost immediately

following the formation of Proton. Also ASEAN Free Trade Area (AFTA)

agreements on relaxing entries into the ASEAN marketplace had exemptions

specifically for Proton. The Malaysian government gained a three-year exemption

for Proton from 2002 to 2005 where entry tariffs had to be lowered to 5%. This

was replaced by other duties such as excise duty resulting in no net decrease in

automotive prices for importers.

For a short time, the Proton Wira was marketed in the Philippines via LHD in

1994 with the establishment of Proton Pilipinas through the ASEAN Industrial

Joint Venture (AIJV) Scheme[13][14]before they pulled out due to the 1997 Asian

financial crisis.

In Indonesia, through its subsidiary PT Proton Edar Indonesia ("PT-PEI"), Proton

launched the Proton Neo and Proton Waja at the 15th Indonesia International

Motorshow, the biggest automotive event in the country. With these new additions,

Proton now has four models in the Indonesian market. On 16 March 2007, the

models Gen.2 and Savvy were to mark Proton's entry into Indonesia.

Thailand saw Proton's foray during introduction of Proton’s car line-up for

Thailand at the Thailand Motor Show in early December 2007. Proton entered the

Thai market through authorised dealer Phranakorn Auto Sales Co Ltd, which Ltd

previously held the distributorship for Daihatsu, Opel, Hyundai and Holden, and is

currently distributing Honda, Isuzu and Chevrolet cars as a mega dealer.

[edit]Australia

The Jumbuck, known as Proton Arena in Malaysia, was introduced in 2003, is the

last of the Proton models on sale in Australia that still uses the old Mitsubishi

technology. It has been an important model for Proton here in Australia providing

the market with a unique blend of passenger car-based design, half tonne capacity

and low cost entry and running costs.

The Jumbuck has been Proton's bestseller since 2003 in Australia's

famous ute market. The compact four cylinder Jumbuck has been designed to

deliver passenger car comfort while meeting the demands of a workhorse vehicle.

With good ground clearance, a roomy and very usable load area and a strong

payload the Proton Jumbuck is proving ideal for a wide variety of uses from city

delivery operations, to tradesman's ute, farm vehicle and even as an economical

and stylish lifestyle transport for urban dwellers.

Recently, Proton included a free 50cc ATV quad bike with every Jumbuck.

According to Proton Cars Australia managing director John Startari the Jumbuck

quad bike offer is a way of adding extra value and enhancing the attractiveness of

Australia’s toughest half tonne ute. “Jumbuck has found great favour with buyers

around the country thanks to its economy and reliability and this special limited

offer will make it even more attractive,” Jumbuck was voted the lowest cost

commercial vehicle to own and operate by NRMA Business Wise and is the

perfect solution for hobby farms or as a company vehicle.

Through it fully owned subsidiary Proton Cars Australia Pty Limited, Proton's new

S16 passenger car has provided a significant boost to the Malaysian car company's

sales performance registering a 113.5 percent increase in sales volume for January

compared with the same month in 2009.

Along with a low purchase price the Proton S16 is economical to own and run

sipping an average of just 6.3 litres/100 km as per ADR 81/02 while producing

82 kW at 6,000 rpm from its 1.6 litre CamPro engine. Proton S16 is the only new

four-door sedan available in Australia for less than $16,000 and outperforms many

low cost hatches and three door models by offering a 1.6-litre engine and great

equipment levels. Miss Universe Australia 2009 winner Rachael Finch was the

proud face of the new Proton S16 and was featured in TV commercials and print

advertising campaigns.

In the 2010–2011 NRMA vehicle running costs survey with the popular Persona

took the crown as Australia’s least expensive small car to operate. The 2010–2011

NRMA survey investigated not only the purchase price of over 1200 new cars but

also fuel prices, depreciation, maintenance and insurance based on an annual

distance of 15,000 kilometres travelled over a five-year period and Proton came

out well on top. In the small car category Proton dominated with no less than six

Proton variants in the top ten, also taking out the top 3 positions Both the Persona

and Gen.2 vehicles are featured in the small car category's Top 10.

[edit]China

Recently Proton returned to Guangdong, China, where it did business in the past

but withdrew after having a poor sales record. In July 2007, Proton signed an

agreement with Youngman Automobile Group Ltd. Co., paving the way for the

national carmaker to offer its products and services in China. Under the

agreements, Youngman would import 30,000 Gen•2 CBU (completely built-up)

units and resell them under its own EuropeStar brand and eventually develop a

new range of Made-in-China cars with the engineering services provided through

Proton's Lotus.[15] Proton expected to ship 1500 cars a month for 20 months starting

December 2007 to fulfill the order.[16]

The Europestar RCR was officially launched in China on the 9 January 2008 in

Beijing. Europestar is a brand of Youngman Automobile Sales Co. Ltd., and the

Europestar RCR is basically a rebadged Proton Gen•2. Youngman was confident

of selling the 30,000 CBU units of Proton Gen•2s within the 20 month delivery

period, and appointed 40 dealers to support the launch in terms of managing its

sales, service and spare parts operations for the Europestar brand in China. CKD

operations will begin soon after at Youngman’s plant in Jinan, which has an annual

capacity of 300,000 units.

[edit]India

The market in India is for small cars, namely the A segment and B segment cars as

well as MPVs. Proton Holdings Bhd. intends to finalise discussions with a global

original equipment manufacturer (OEM) within this quarter to set up contract

assembly manufacturing operations in India. Proton was hoping to engage in

contract assembly manufacturing via a joint venture effort with the OEM. They

like to incorporate their own subsidiary that would work with a local partner to

distribute cars in India. The local partner in India “already had a plant and

assembling its own cars.” Proton was looking at offering the Saga, Persona, Exora

multipurpose vehicle (MPV) and Emas hybrid in India.

[edit]Russia

Proton Holdings Bhd's entry into Formula 1 (F1) racing is more than just about

turning around wholly owned Group Lotus, as it may also open doors for it to do

business in Russia. Genii Capital, the investment company that owns Lotus

Renault GP team, the team Group Lotus partners in FI, thinks it could help Proton

enter the emerging market of more than 160 million people.

Genii is owned by Gerard Lopez and Eric Lux, who also runs venture capital group

Mangrove Capital Partners. Mangrove is famous for its hugely successful bet on

Skype, which lets people make free phone calls over the Internet. As for Genii,

now the 100 per cent owner of Lotus Renault, it has signed a deal that gives Group

Lotus a two-year option to buy half of the racing team. Genii would be able to help

Proton with its business relationships in Russia as well as to access advanced

automotive technologies under its companies.

[edit]Middle East

In Iran, Proton supplied 5,000 units of the Proton Waja to be used as taxis in Iran

through Iran’s Zagross Khodro group. It is marketed as the Proton Impian there,

the same name used in other export markets such as the UK market. Iranian

President Mahmoud Ahmadinejad and Malaysian Prime Minister Abdullah Ahmad

Badawi signed a Memorandum of Understanding (MoU) in Tehran in the same

regard.

Director Generals of Iranian Zagros Khodro and Malaysian Proton car

manufacturing companies have inked mass production agreement. Proton and

Zagros Khodro companies have been commercial partners for several years and the

new agreement for Gen•2 production in Iran is concluded for a new level of

cooperation.

In 2009, a group of Iranian and Malaysian engineers and experts worked in Iran's

Boroujerd Company to run Gen•2 assembly line, to assemble CKD kits of the

Proton Gen•2 at Zagross Khodro’s plant in Borujerd. The same plant also

assembles Proton Wiras. There are currently 9,634 Protons on the road in Iran

today, after Proton’s entry into the Iran market in 2002. 50,000 units Gen•2 cars

will be produced yearly within the next five years with Proton's supports

production and supply car parts.

Proton first entered the Syrian market via a sole distributorship agreement with a

Syrian company, Modern Technology Trading Company, a subsidiary of Habbal

Group of Syria. The company, headed by Habbal Group chairman and chief

executive officer Ghyath Al Habbal, holds distributorship rights for Proton cars

in Syria, Iraq and Lebanon. Proton Holdings Bhd is strengthening its presence in

the Middle East market, with the launch of the Persona model, is expected to boost

the national carmaker’s overall sales in Syria to over 5,000 units in the next three

to five years. Proton have been selling cars in Syria since 2001 and after Gen•2,

they are optimistic on how the Syrian market will accept the Persona, which has

won many customers for being cost-effective with better fuel economy.

The Persona was launched by Proton Holdings Berhad Managing Director Dato’

Haji Syed Zainal Abidin Syed Mohamed Tahir in Kingdom of Saudi Arabia on 22

November 2011 and in Egypt on 24 November 2011. The Gen•2 model was also

jointly launched in Egypt. Proton had entered the Saudi market in 2006 when it

introduced the Waja model via a smart partnership collaboration with local outfit

Al Rashed Al Thunayan Auto Co.In Egypt, Proton first launched Waja and Wira

models in 2001 and in 2006 brought in the Gen•2 hatchback. Similarly, Proton had

also established a smart partnership with an Egyptian company Alpha Ezz Elarab

Co. as its distributor in the country. Both Al Rashed Al Thunayan Auto Co. and

Alpha Ezz Elarab Co. have been instrumental in the development of Proton sales in

Saudi and Egypt respectively.

[edit]Japan

The 2011 Proton Satria Neo CPS R3 was debuted during the Tokyo Auto Salon

2011. Japanese auto part company Carrosser Co., Ltd. (CUSCO) imports the 2011

Satria Neo CPS R3 and equips the Satria Neos with CUSCO performance parts

before being resold to rally teams in Japan and Asia Pacific. As the importer and

distributor of the Proton Satria Neo from Malaysia to Japan, Carrosser had taken

on a project to build a Group N machine for the CUSCO Junior Rally Team with

this chassis. In addition, CUSCO also forms their own team running on the Satria

Neos to compete in the 2011 Asia-Pacific Rally Championship, making the team as

the second team to use the Proton Satria Neo for the championship.

Charges of protectionism

When the first Proton appeared on Malaysian roads in 1985, the Proton Saga soon

received the nickname 'Potong Harga', meaning 'cut-price', The car was at least

20% cheaper than non-Malaysian makes in the same 1.3 to 1.5 litre class. With

both the low price and a dash of national pride working for it, Proton got a rapid

hold on the market. By 1988 Proton, with a model lineup of one, had overtaken all

other makes and models and grabbed 73% of the Malaysian passenger car market.

In 1983, when the 'national car' was planned, Malaysia had an annual new car

market of about 90,000 units, and the market was growing annually by 20%.

Proton plant was designed to produce 80,000 units a year and could be geared up

to 120,000 units. But in Proton's first full year of production (1986), total car sales

took a severe dip to 47,000 and next year, due to a worsening economic situation,

just 35,000. Only in 1988 did the market begin a recovery to 54,000 units, by now

most of them Protons. Since then, the market has grown steadily to a 2005 peak of

417,000 cars[25]

Government policy has kept the Proton cheaper than other makes by the simple

strategy of taxing the competition, while giving Proton exemptions or rebates from

these same taxes. Duties on packages of parts for assembly into complete cars in

Malaysia is said to average about 30%. Proton is exempted from most of these[26]

On 1 January 2008, the postponed-several-times full implementation of an ASEAN

Free Trade Agreement[27] that Malaysia originally signed on to in January 1992,

was to finally have come into effect. The agreement would effectively bar practices

that discriminate against goods (including vehicles) that are considered “Made in

ASEAN” by the use of Tariff and/or Non-Tariff Barriers. This would practically

eliminate most of the price advantage, achieved by way of the 50% rebate Proton

(and other “Malaysian-made” cars) enjoy on a hefty (75 to 105%) engine-capacity-

related Excise Duty applied to new cars sold in Malaysia.

This rebate is largely responsible for non-Malaysia ASEAN-made cars costing

between 30 and 60 % more than an equivalent Malaysian-made vehicle. With a

“level playing field”, within the confines of CEPT[27] (which till end 2009 allows a

maximum 5% import duty, reducing to zero in 2010) using existing FOB prices, an

ASEAN (Thai-made) Honda or Toyota would sell for within 10% of a comparable

Proton, and would probably result in the devastation of Proton's market share and

the company. As it appears that this would be an unacceptable consequence to the

Malaysian government, for the time being, local car manufacturers will be allowed

to continue receiving the excise duty rebate, with the Malaysian Government

picking up the tab for probable penalties it will have to pay to ASEAN members

for violating established free-trade regulations.

As 2008 progressed, it became apparent that more and more global manufacturers

reasoned that the level playing field stipulated by CEPT will continue to be ignored

by the Malaysian government for as long as possible. This temporarily derailed

these manufacturers' previous plans to use Thailand (principally) as their ASEAN

manufacturing hub, and forced them to reintroduce Malaysian-assembly of some

models from CKD. This move allowed these foreign marques to benefit from

better tariff structures applied to such vehicles, in an effort to remain competitive

(in the non-National car segment), and to narrow the price difference between their

models and equivalent (Excise Duty rebated) Malaysian-made cars.

The very latest update to the Malaysian Automotive Policy framework (October

2009) failed to mention any change in this discriminatory rebate policy, thereby

reinforcing the suspicion that the Government will not abide by stipulated "level

playing field" requirements for the foreseeable future. It should be noted that the

main “solution” being pushed by the Malaysian Government to maintain the

pricing advantage of locally made cars, by providing grants and subsidies (to

counteract any potential removal of the excise Duty rebate) would also be deemed

to be non-compliant with the Trade Agreement, contravening Non-tariff barriers to

trade requirements.

The lack of direct competition at Proton models' price points (in Malaysia) has also

allowed Proton, for many years, to continue selling very outdated designs,

generally with scant regards to providing basic safety equipment such as airbags

and anti-lock braking in domestic models. Additionally, J.D. Power survey results

have consistently shown that Protons have poorer rankings in initial quality than

the available competition[28]

PETALING JAYA -- Proton Holdings Bhd is optimistic of monthly sales of

4,000 units for its highly-anticipated new car model, codenamed P3-21A,

Group Managing Director, Datuk Seri Syed Zainal Abidin Syed Mohamed

Tahir said.

He said the car, scheduled to be officially launched by next month, will redeem

Proton's image as a capable manufacturer of cars and attract buyers from both the

local and overseas markets.

"The P3-21A is a C-segment car and we hope to sell about 4,000 monthly once

fully launched.

"We cannot design cars for the domestic market alone now. It must be also for the

export market. We are quite confident that the P3-21A can be marketed overseas

and Proton is already undertaking testing of the car for sale in South East Asia and

Australia.

"This car is in line with Proton's stand of making global cars as we are trying not to

be dependent on one specific market. The emerging markets for Proton cars

include China, Indonesia and India," he told Bernama on the sidelines of Proton's

"Power of 1" open day at the Bukit Jalil National Stadium, here today.

Syed Zainal said the new P3-21A also meets Proton's definition of "global", where

every inch of the car, needs be attractive while meeting stringent global

specifications.

He said Proton has given importance to the styling of the car to attract a global

audience, while previous models, were more tailor-made for the domestic

environment.

"Secondly, we have paid much attention to the car's safety features, including body

strength and accessories as well as handling system.

"All these steps were taken after serious consideration of the objective of creating a

global car.

"Each car we produced was meant to improve Proton's image among customers.

But this new car is different. It is not that Proton is unable to build cars meeting

global standards but Malaysians want such cars at an affordable rate but it does not

come cheap," Syed Zainal said.

He expressed the hope that the P3-21A proves an attraction for Malaysians.

The indicative price for the P3-21A is between RM62,000-RM75,000, with the

actual price slated to be announced during the official launch.        

http://www.nst.com.my/latest/proton-targets-sale-of-4-000-units-of-p3-21a-

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