Where Malaysia’s automotive industry is concerned, it’s difficult to avoid bringing up DRB-Hicom in a conversation. Perhaps best known for being the owner of Proton Holdings Bhd, the industrial conglomerate also has, amongst others, the Honda, Isuzu, Suzuki, Mercedes-Benz and Volkswagen brands in its local-assembly and distribution stable.
Although a huge majority of the group’s revenue currently comes from the automotive sector (bumped up further by the acquisition of Proton), DRB-Hicom is keen to point out its investments in other sectors, namely services, property, assets and construction.
At a recent press conference held during the firm’s annual media getaway, group MD Datuk Seri Mohd Khamil Jamil said: ”It’s not about one particular company or person. We have many other investments that will help DRB move forward.”
Developments of late include the merging of Proton Edar and EON, JVs with HBPO and Faurecia to develop, manufacture and sell auto components, and the expansion of POS Malaysia into courier and logistics areas.
Naturally, however, we remain car-concerned, and a couple of issues came to light regarding the automotive sector, although few in-depth details were revealed. Mohd Khamil said that Proton will be involved in the Asian Car Project, which is expected to see Malaysia being made a regional hub for Volkswagen production. The aim is to begin exporting by 2014.
“The (ASEAN) region is now very promising. The needs are growing and buyers are becoming more sophisticated,” he said, adding that cars sold in the region were all of brands outside the region. “Proton being the only indigenous car brand in the region should champion this.”
Little was said about the collaboration agreement signed between Proton and Honda, save for it still being in the “exploratory” stage. For the Japanese carmaker, RM350 million has been invested in the Pegoh plant to double capacity to 100,000 units per annum by the end of this year.
Proton’s main issues are product quality and after-sales service, acknowledged Mohd Khamil. To that end, vendors will be rationalised into a number that Proton can manage and will be subject to more effective scrutineering. Those that consistently do not deliver will be cautioned and subsequently, their services terminated.
An effort will also be made to improve after-sales service by ensuring Edar adheres to a standard operating procedure of good quality. Practices garnered from overseas OEMs from the Pekan Automotive Complex will also be put into place at Proton.
All this is certainly needed to ensure that things pick up, in more ways than one. A report last week indicated that Proton is in danger of slipping into third spot in passenger vehicles sales behind Toyota and market leader Perodua in the country, with Proton’s market share reportedly sliding to 17.7% in December 2012, just a shade ahead of Toyota’s 17.1%.
The export market is also to be prioritised. ”We have started the rationalisation of the export market. Currently, we are exporting less than 20,000 cars. The volume must go up to bring costs down. Within five years, I would like to see 500,000 cars produced by Proton. We are prioritising countries that Proton can do well in,” Mohd Khamil stated, citing Indonesia and China as high-potential markets.
With regards to rumours of the possible privatisation of DRB-Hicom, Mohd Khamil mentioned that “at our end, we haven’t any notice that we will go private.” He also divulged that Indonesia would be the Proton Prevé’s next destination, after its Australian and Thai debuts.
In a possible reference to the global small car project, the group MD added that “Proton is missing from the city car, or A-segment. We want Proton to be represented in all segments.”
Proton officials remained tight-lipped about the Petronas engine technology and patent acquisition, save for that the technologies could be applied to any given industry equipment, but reports say the turbocharged variants may find their way into the replacement for the Proton Perdana, word of which hasn’t come about for quite some time.