The Automotive Industry, first half of 2006

The Malaysian Automotive Association (MAA) has revised it’s forecast for vehicle sales this year, lowering it to 520,000 units instead of the previous 565,000 units figure. The new forecost would mean a 6% drop from last year’s 551,042 cars sold instead of a 2.5% increase with the previous figure. It’s not just Malaysia who is facing this problem, even Philippines and Thailand had experienced dropping sales in the first half of 2006 compared to the same period last year. The Indonesian car industry took a big hit, with a 49% drop in sales volume, likely to do with the new fuel prices there.

Perodua sold 78,396 cars compared to Proton which mnaged 60,246. Perodua’s market share now stands at 42.4 percent, while Proton is at 32.6 percent. It looks like UMW is the juggernaut right now, commanding a total of 49.7 percent of passenger vehicle sales through Perodua and Toyota. Almost half! One of Proton’s Key Performance Indicators for the financial year ending March 2007 is a 46% market share, but this does not look like it’s likely to happen very soon. While the overall industry is experiencing a drop, 4WD vehicles experienced a growth by 2.2 percent. Proton does not have a 4WD vehicle for sale, while Perodua has it’s Kembara.

There also have been concerns on Proton’s stockpile of cars which are said to be piling high without enough sales to move them. Proton says that it will maintain it’s production target of 40,000 to 50,000 cars a year out of a maximum capacity of 150,000 units on double shifts. Proton director of manufacturing Datuk Kamarulzaman Darus believes that the current production volume would be justified on the continued demand for Proton cars.

Proton also says a new model is in the line-ups to be introduced next year, although the model is still in discussion stages. No details have been revealed except that it is not an SUV model. From discussion to introduction in about the time span of a year? Datuk Kamarulzaman also says Proton cannot reveal any details yet before gaining approval from partners, so this should be a joint-venture for an MPV or a large executive car considering the mention of partners and a fast time to market.

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • avanza (Member) on Jul 28, 2006 at 11:15 pm

    Most likely just rebadged given that short time frame. More rebadged cars for Malaysians!!! DUH!

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  • szw (Member) on Jul 28, 2006 at 11:33 pm

    don try to hope 4 gainin half of da market lar perodua .

    balik kampung lar !

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  • Dogster (Member) on Jul 28, 2006 at 11:49 pm

    Good going PROTON . ;) MAtiiiiii, Payback for giving us rubbish :D LOng Live Perodua :)

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  • KY (Member) on Jul 29, 2006 at 12:09 am

    an MPV would challenge NAZA's dominance in that area while hopefully wiping off the humiliating memory that is the Juara

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  • Jazzy_Jay (Member) on Jul 29, 2006 at 12:27 am

    While I am not really keen on Proton's product quality. I cant see any reason behind supporting a local establisment which is owned by outsiders, in this case – Perodua. As much as I do agree that many has fallen under Proton's quality issue's, I doubt Perodua's is much off any better. Yes, I drove a Kancil – so I know. The reason why consumers' could oversee these nick-nack quality issues on Perodua is just because of its sheer cheaponess… or bang for the buck so to say.

    I truly believe that Proton should be the No.1 key player in the Malaysian automotive market. May it be with or without government protection. Why support other manufacturers why Proton is the company that is driving Malaysia upfront in the technology frontline?

    However, Proton must also do their part, by eradicating quality issues, develop proper vendors who can provide good quality parts on time, churn out more models based on common platforms and also maintaining their key selling point which is affordability – in other words: HAVE PROPER MANAGEMENT WITH A GOOD FORESIGHT!

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  • drM (Member) on Jul 29, 2006 at 12:27 am

    they even presented Neo few months late than its scheduled. so, no wonder the so called 'next model due next year' will definitely be presented next-next-next year (next = 1 year) hahahahahahha…alamak..i forgot the Neo motto la…(planning to end my comment with it) duh!

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  • mycar_stolen (Member) on Jul 29, 2006 at 12:36 am

    Proton going to close shop….yeba yeba yeba

    Proton sure die

    Please dont buy Proton…Let Proton Die

    The FASTER THE BETTER.

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  • blunt (Member) on Jul 29, 2006 at 1:17 am

    funny…there are still some people who choose not to understand..

    yg neo lambat bcause it is previous mgmt nye projek..

    so, mr syed also want to insert his DNA to neo…and to ensure that everything is ok, at least from his view..thats why dia released lambat..

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  • blunt (Member) on Jul 29, 2006 at 1:19 am

    i say..lets Proton and P2 die…both give rubbish..anyone agree..

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  • kody (Member) on Jul 29, 2006 at 2:07 am

    Wahlaueh…

    'Jazzy_Jay' you like big fan of P1… still hope P1 can do better… there is no major improvements (from what i saw & people critics), only now when they realise market shares drop then… only 'kelam kabut' … :)

    Go P2… i support you even i dun hav any P2 products… haha…

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  • blunt (Member) on Jul 29, 2006 at 2:29 am

    friends out there..

    do not support blindly…i P2 owner..my statements retained…P2 u are greedy..x percaye..how much P2 charge for the plain first aid kit..go find ur self

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  • lowprofile (Member) on Jul 29, 2006 at 2:46 am

    i agree. p2 is getting greedy. not as open as p1 but still, it will be noticed sooner or later. once ppl notice this… and react to it (like in p1 and kah motor's case with honda), p2 will be in trouble. we are not that easily conned these days.

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  • whodz (Member) on Jul 29, 2006 at 2:46 am

    hey blunt, you forget la. If you want the sibling die, you better not to forget the youngest brother, P3 (NAZA), this is the most useless younger brother. So lazy and want big name oni.

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  • gokibin (Member) on Jul 29, 2006 at 2:49 am

    Put it this way, I love P2 n P1.

    If u were in Miami, and saw a Proton zooming past u, wouldn't u be proud? Not nationalistic, just happy n proud that some ppl from msia manage to get a car sold n driven in the States.

    No matter la if P2 owned by Toyota, it's still msian name. Still Msian brain, Msian hands etc doing the work. Come on la… have some pride. Sure, we can't do original stuff, but if u see japanese n koreans, they took long2 time to get where they r now. so, keep on criticising but also encouraging. No difference btw P1 n P2, both Msian flagbearers.

    Also, that myvi demographics thingy, i think it's a bit racist la. I think we should start thinking we're Msians rather than focusing on the ethic stuff.

    Lastly, I just saw that Jeremy C vid on Kelisa. P1 n P2 should look at it n be fired up to prove that they can do better job. Thanx Jeremy…

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  • blunt (Member) on Jul 29, 2006 at 2:59 am

    yeah,

    INOKOM also..

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  • Jazzy_Jay (Member) on Jul 29, 2006 at 3:21 am

    Kody,

    Im not a Proton lover. I am just looking at things from a very nationalistic and through a very big scope of view.

    Generally, I have to say that Proton is the key to pushing Malaysian automotive technology upfront. No matter what we think, no one outside is gonna teach us 100%. They would rather see us fail than see us succeed. So to say, thats what it was when Proton was trying to learn from Mitsu. Now that Proton owns Lotus, they should capitalize on what they have in their pockets.

    In an ideal world, I would wanna see a full fledge protection for any NATIONAL CAR MANUFACTURERS (not just assemblers). Why? Because they bring knowledge and technology to the country. So basically, if NAZA is able to produce their own car – then fine give them the same form of protection. Do away with the silly taxes on local cars! Then the rakyat can enjoy cheap cars. However, the manufacturers must play their part as well to give back to the rakyat… the bang for the buck. Take the oppurtunity of protection to improve further. Make Malaysia as their source of market base. Improve on quality and model releases. In this way, Malaysians are "forced with a willingness" to buy the car, instead of "forced due to financial constraints" to buy a car. When you have such huge backing of a local market – then you can start venturing boldly into the international arena.

    However, thats an idealistic thinking… which I doubt I could see it happen.

    Sad to say but true.

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  • stanleyshyeoh (Member) on Jul 29, 2006 at 3:28 am

    Have some pride? Not me. I'm not proud when I see a Proton zooming past me in a foreign land. I say to myself, why the heck this fella wanna buy a Proton when he could be better off with other makes. Proton is a national embarassment to me and I seriously do not see Proton going anywhere. Proton will never gain an ounce of my support unless taxes is remove and competing in a fair and level playing field.

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  • e-nabilll (Member) on Jul 29, 2006 at 6:52 am

    proton should simply jus join the bandwagon with othr manufacturers…wen thy see SUV sales are good..thy should build one..same with mpv…thy dont have to make a great car..jus a proper car that is wanted by customers and not wat proton thinks the customers want…i believe the way the market is now…i tink proton and probably perodua should concentrate on export to compensate for lack of sales locally…msia market is not a big one…so wen the name is tarnished like proton…its hard to change mindsets…so best way is to take ur products to othr market wer thy r starting fresh…proton now should concentrate on proper products…quality..n increasing sales abroad….u can only sale so much locally thn wat?…

    and i do agree with Jazzy_Jay …proton had a big part in local technologies and thus our society rather than jus othr assembelers of foriegn cars of copy and paste jobs…and i bloody hate Naza for wateva thy r doing…copy this n that….n its beyond me how thy can get so much tax incentives From the G as much as proton for being a "local automative manufacturer"….yeah rrrrriteee!

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  • jtshin (Member) on Jul 29, 2006 at 7:21 am

    I'll still feel proud if saw Malaysian made cars on the road in foreign coutries… even though its not very good made.. n its cheap outside… if earn foreign $, maybe get a P1 or P2 car if available… if wan new one… cos can afford ma… right? hehe… maybe only la… but i think i'll still proud lo…

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  • topgunthang (Member) on Jul 29, 2006 at 11:05 am

    any country can make a 'proton' if they want to….but most countries also realize to sustain a car company that does badly is not a good idea….for the country economically. for me i also think when i see a person driving proton on foreign road…..i have the same feeling as someone posted above….that that person is an idiot.

    you can guarantee proton wont make sales anymore internationally. thanks to the thai motor industry. no need to waste 30 years of citizens money setting up a car company thats going to fail eventually…..you get about a whole lot better deal with a few good years of good decision making.just about every car company in the world is looking to invest in thailand right now.

    frankly speaking….it is impossible for proton to make sales abroad. with japanese cars already taking a large piece of the market internationally, europeans on the rise, and hyundai taking the rest of the market of which proton is trying to get. lets not forget china is also able to overtake proton pretty soon and perhaps compete with hyundai on the 'disposable car' market. there is no market left for proton (except for msian market). no matter how much expertise lotus has, its not gonna help proton much. lets not forget lotus itself is a failed company and other car companies with bigger cash warchests didnt bother to buy up (even though they were experts within thier field)….which led to proton buying it out.

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  • king (Member) on Jul 29, 2006 at 11:22 am

    P2 is actually T2 (toyodua)…better change name. Both damn greedy and many fools got swindled by then without even realising it. I think alot of ppl dun know how to see the value of a car at all. P2 cars can't last longer than P1 car oso but alot of ppl comment/support blindly by saying P2 good bla bla bla….just bcos they are under toyota. Both P1 and P2 cars are rubbish by international standards ( especially safety ) but i can assure you that T2…i mean P2 is making a real juicy fat profit compared to P1 at the expense of your life.

    Lets look at this example where they sell a kancil auto for 35k …14k(67%) more than a kancil 660 manual which is already overpriced. Pls use your brains and think what is the logic of that? Must be a "tiptronic" gearbox for pricing this high. Coz there is no competition at this category….more accurately there is no automatic car at this category and they know 90% of female drivers drives auto only. Go…..support them and fill their greedy pockets more. They are the real crocs to me….submerged in water so no one can see.

    Therefore they will continue to prosper as more external factors such as rising oil prices boost P2 sales and kill p1 sales….although if you have driven a kancil auto b4 you will know the fuel consumption is not good at all. It only has a psycological effect on you.

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  • ... (Member) on Jul 29, 2006 at 11:38 am

    excuse me mr king…

    the auto kancil is 850cc with DOHC fuel injection engine and its price is RM31k

    to compare with the kancil 850 manual with SOHC carburettor engine is RM28k. So a 3k difference for an auto box and a much better engine is quite reasonable.

    To be honest most malaysians have made their preferances. just look at this year's 1st half automotive sales results. Most ppl dont support something blindly. they say things from their experiences. and P1 has leaved a bad taste in alot of ppls mouths. thats a fact P1 has to live with and hopefully learn something and do their utmost to mend it.

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  • king (Member) on Jul 29, 2006 at 12:34 pm

    mr. triple dot,

    pls check your OTR price b4 commenting.

    PERODUA KANCIL 660 EXB

    OTR 22,523.50

    850 EZ M

    OTR 34,204.60

    Go see their own website yourself. What a problematic p2 website always hang and load halfway only need to wait nearly 1 hour for the page to load.

    So what if the 850 is dohc? is it worth more than half another 660 kancil for that dohc + 0.19L + autobox??? Like that i add vvti can sell 2 times the price….add turbo can sell 3 times the price? You think the buyer that wants performance will buy the auto?

    I am not a p1 fan but i can't stand dirty crooks thats all….

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  • 4G63T DSM (Member) on Jul 29, 2006 at 4:00 pm

    Mr. King.

    The pricing strategy of the 660 and a 850 auto is that because of market demand and competition. The 850 Auto commands a premium price because there are little else out there that can compete with it (ie, small cheap car with an Auto). Once they have more cheap small auto's out there, you can expect the the 850 Auto's price to go downward.

    You can't exacly compare pricing like that. Its too one dimentional.

    Case in point, at the price class of the Kelisa, you already see a pretty significant downward trend on the Kelisa's price when newer cars of the same class appeared on the market.

    Manufacturers are not for our best interest. They are there to make as much money as they can get away with. If they can take advantage of a situation, you can bet your money that they will.

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  • J (Member) on Jul 29, 2006 at 5:24 pm

    Are there any P1 or P2 working level personnels who can share with us their working experience in the company ?

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  • motorhead (Member) on Jul 29, 2006 at 5:36 pm

    ok, p1 can starts diging their own grave.. but beware, if p1 mampus p2 will dominate & may manipulate the market.. i hope p2 will continue to improve the products regardless p1 condition.. more value for money, ppl will trust ur product or may end up like p1.. bitter lesson for p1, but they ve to swallow la.. what u give, is what u get.. now its very difficult for damage control.. ppl r getting smarter & become more brand concern.. now p1 has turned into craps brand…. i oso ve lost faith.. heard enuf from my p1 owner friends…

    ps: So sorry p1, pls take care or die in peace…

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  • scudracer (Member) on Jul 29, 2006 at 5:53 pm

    King, I agree with you. I believe TM couldn't even see his competitor. He was busy looking at an under 5000 unit/annum market (CBU Benz) and Koreans with +/- 30k/annum when T2 (oops, P2 or Toyota Jr. aka Daihatsu with Malaysian mask P2) sold 139,000 units in 2005, add the Toyota figure of 91,000 units in 2005 and you get 230,000 units!! Toyota Group OWNS the Malaysian car industry. Honda only sold around 28,000 units in 2005, with Nissan even less than that.

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  • rexis (Member) on Jul 29, 2006 at 6:18 pm

    P1 wont die so easily without dragging us down to drain together…

    Btw, their recent new cars like Savvy and Neo, so far i did not hear much complaints about their quality yet. Guess that means their quality is improving, P1 is heading to the right direction now. And next only if they are bright enough to make something that suit for everybody, they can survive.

    Savvy – have to fight with a market that dominiated by p2 cars, and somemore with a premium price.

    Neo – looks nice but very limited market.

    Upcoming:

    WRM – doubt they will have any by looking at their current budget and capasity.

    Saga Replace Model – I think the good-o-saga will b there for another couple of years/decades

    PRM – for the price range of perdana, still need to fight with lots of foreign car. Really doubt it will generate much income for P1

    MPV – Now the curious part is what price range they will offer it, if they can make a decent MPV and priced for under 50k, bravo this will be an Anti-Myvi weapon, at 60k you fighting with Avanza, at 70k-90k, you still fighting with Avanza and your own Waja, at 100k you fighting with Innova, and anything more is rediculous.

    The great brains in P1 aint so complicated, no?

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  • OtakOtak (Member) on Jul 29, 2006 at 7:11 pm

    So the 2nd half 06 most likely will see P1 issue VSS to trim it workforces. EON already do that! Later on Proton Edar and the "Domino Effect" is there, the vendors/supplier will follow suit and eventually CLOSE SHOP.

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  • Driven2020 (Member) on Jul 29, 2006 at 8:03 pm

    They are in a dreadlock condition. Based on their workforce, production output, facility cost, R&D cost, marketting and others they would have estimated income based on those criteria. previously they could maintain due to healthy sales. but the fact they could maintain is due to sales of long overdue existing models mainly the iswara and wira. i doubt their newer models ever contributed a commendable fraction in their overall earnings.

    Now with the release of waja, gen2, neo and sorts. sales have been steadilly declining. talks about replacement for iswara n wira is a good idea but seems it won't happen yet. may not even happen at all. recently they have been bombarded with qc issues. to add salt to wound, p2 has surpassed their sales record and p1 does not seem to be able to react to that even with neo out.

    If they do the VSS then its no turning back.

    all these things are due to p1 own doings themselves. they have got themselves into this on the very beginning. maybe because they din realise it as they were protected by the government. truth hurts when it has been standing in front of you from day one.

    p2? true essentially a toyota company but regardless of speculations, they are selling better and that itself is a very clear indication that p1 has management issues. i hope the new ceo can really overcome this.

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  • OtakOtak (Member) on Jul 29, 2006 at 8:32 pm

    So P2 as Perushaan Otomobil Kedua Sdn Bhd (Perodua) have to upgrade themselve including to change the name to Perushaan Otomobil Pertama (or Toyota Malaysia) Sdn Bhd (Perotama) to reflect their new status as dominant player and No. 1 car manufacturer/seller in Bolehland!

    P1? huh, go ahead with VSS, Perotama absorb P1 excess workforce just like AirAsia do toward MAS with MSS, and P1/MAS can sell to any party interest including foreginer or close shop if continue like that.

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  • blunt (Member) on Jul 29, 2006 at 8:58 pm

    dear friends..

    still fresh in my minds P2 reduce the great RM 300 for kancil after NAP announced, cited that they make a very marginal profit. Then, TPM, intervene..later they reduce a few hundreds more..

    A mere RM 300..if is not insulting i dont have anymore suitable words..

    why 300..because they managed to sell the downgrade passo so well..they become greedy

    i agree with King…i'm not a P1 fan..but pls do not praise P2 to high..

    to cody, motorhead…just browse Myvi owner clubs and read for yourself the 'rintihan' of Myvi owner..

    are myvi a great car..i dont think so..but passo/boon definitely good

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  • topgunthang (Member) on Jul 30, 2006 at 2:25 am

    yes, 300rm is pretty insulting to any citizen of any economic class.

    the proton neo is a crap car and is a guaranteed flop. it wont make it overseas and if they do they are just shipping cars for the sakes of figures on the export list. i beleive it will fail in msia badly as well. it will be guaranteed once p2 makes another good move selecting a good car to rebadge. needless to say with a bit of cost cutting as well.

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  • weili (Member) on Jul 30, 2006 at 10:39 pm

    Pleas pay a visit to the nearest port authority and see the stocks of potong there…..some of the cars already karat and the paint fade yet still lying there to wait for their judgment day.

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  • king (Member) on Jul 31, 2006 at 8:20 am

    blunt,

    i knew the myvi ppl were suffering inside and been keeping quiet never mention all the problems. Looks like its even more problematic than a gen-2. This is a very bad syndrome spreading to our country. They thought just bcos toyota is the parent automatically p2 products are of high quality.

    Over in europe, many ppl buy lexus solely for its quality and reliability. But when there is a problem with their car they keep quiet coz they are ashamed. Why? simply bcoz if u bought a ferrari mainly for performance but you were outperformed by a souped up honda civic in a drag race will you tell ppl about it? Hell no!! Obviously in this case its not likely to happen. This is one reason why surveys are not really accurate.

    Anyway….good luck to myvi owners and hope the burning/smell below the rear seat stops.

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  • mycar_stolen (Member) on Jul 31, 2006 at 5:26 pm

    ok ok I noticed that P2 is crazy type of greedy..but all of us have one mision…CLOSE PROTON. better to attack one enemy at one time…you will be more focus and accurate. but actually P2 learns to be greedy from big(stupid/arrogant/fugly/irritating)bro P1.

    PROTON is NATIONAL EMBARASSMENT

    PROTON failure is not Malaysian Failure.

    PROTON treat Malaysian like "bohsias" why you still want to support them.22 YEARS++ enough enough enough of insult,bullying crazy power window.."still rosak"

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