More than 100 Malaysian parts suppliers and vendors affiliated with Proton are reportedly facing a severe financial strain due to escalating operational expenses as a result of dwindling orders, the New Straits Times reports.
The situation has prompted the Proton Vendors Association (PVA) to reach out to the national automaker, asking it for help in addressing the challenges vendors are encountering. However, the automaker has shown no willingness to address the issue, according to Datuk Liu Guoquan, president of the Malaysian Fujian General Chamber of Commerce.
He said that numerous suppliers and vendors are currently grappling with financial distress, primarily due to dwindling orders recently. He attributed the root cause of the issue to Proton’s failure to fulfill the promised quantity of parts orders for its X50, X70 and X90 models, which had resulted in a 30 to 50% reduction in parts production output.
Echoing these sentiments, an anonymous supplier disclosed that while the original contract from Proton promised to obtain the supply of parts for 1,500 units of the X90 per month, the actual monthly order volume was only between 200 and 300 units.
As a result of this shortfall, Liu said many vendors are experiencing financial losses, forcing some to cease operations altogether. He added that if the situation persists, it could lead to the collapse of many suppliers, affecting around 50,000 employees across the automotive industry chain.
He criticised Proton’s decision to eschew competitively priced locally-assembled (CKD) parts and instead source them from China, citing the reluctance of Malaysian suppliers to reduce prices as the rationale behind this move. Liu said such actions have further strained the relationship between Proton and the vendor association.
In response to the news report, Proton has issued a statement on the matter, printed in full below:
Statement from Proton
Proton would like to address recent media reports highlighting challenges faced by vendors associated with the company.
At Proton, we create an equitable and respectful business environment with our partners built on our unwavering commitment to fair and firm business dealings.
To achieve this, we collaborate closely with the Proton Vendors Association (PVA), the official representative for all 116 Proton vendors, having frequent discussions and joint initiatives that are mutually beneficial.
We understand there are difficulties faced by some vendors and our doors are always open to engage in equitable discussions with all PVA members, except those who are unable to provide clear evidence regarding the issues faced.
It is important to highlight proton has a history of open and constructive dialogue, and we remain dedicated to continuing with this approach for the long term.
We recognise the importance of resolving these matters quickly by working closely with all parties involved and invite engagement via official channels to resolve them at the appropriate time.
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Archaic businessman strategy, invest very little hopes bountiful returns profits ok
I sold off Malaysia to feed my own greed.
And those dumb clueless local budak malas are waitin for my return to scam them again!! LOL
Proton rather outsource parts & work rather than return to their terrible SC attitude, horrible QC quality, no stock spare parts, very bad days.
Not hard to see. Buck up, or off you go.
You loose your competitive, you loose your edge and relevant.
something is weird here. how come the vendor’s rep is a chinese fellow? i thought proton is to memperkasa ekonomi bumiputera? why are the vendors chinese?
Hello? CEO of Proton not even Malaysian lah… at least the vendors are Malaysian.
Puii. If everything still work like the old bumiputra proton way, this proton already close shop long ago
Memperkasa or memperkosa?
Remember Jana Wibawa?
Quite smart also la let the Chinese Tauke talk to the bigger PRC Brother while the majority just sit down shaking legs and hoping others do work and continue to shout issues issues without providing evidence because they feeling quite special like that.
Go back to lowyat and stay there
Though Lowyat 2 is also available are you there too?
Cry me a fucking river. Go queue behind the taxi owners, politicians and other ticks have been sucking the blood of the country’s population dry for decades. Either add genuine value to the industry or get ready to go the way of the dodo bird.
Queue behind us too. We kuat mogok & mintak tolong from umno also
conti car feel, you wait for your parts as long as conti cars
When signing over MOU with geli, no address all this arrangement ka or oppss lupa? What are you trying to project?
Proton’s vendors surely should be laughing all the way to the bank alongside Proton under the current climate, no? Proton has maintained its number 2 position for like 5 years now I think. Why aren’t the vendors making money?
Even if the order commitments cannot be met, surely they are not in bad shape, unless they are over exposed financially.
Apa nak buat? Dah letak downpayment vellfire & bungalow
Pricing of parts are based on commitment and volume.
Make 100 vs make 100k piece not the same in cost bro.
Forecast is the most important thing when supplying auto parts. I have said that before that they don’t adhere to their forecast numbers. How they got their forecast figure is beyond me.
One the other hand, P2 follows their forecast closely. They say they want 1000, they will stick to that figure by end of the month. They even pay the suppliers full amount if they somehow misses their forecast number.
A good auto company is not only determine by how cosmetically futuristic the model it launched, it’s also how they take care of their customers as well as their supply chains.
THE difference between japanese & Chinese brands. Well, geng boikot are bedmates with the Chinese now
that is why P2 or Daihatsu can only operate in a monopoly market. While Geely is worldwide and keep expanding.
The last I checked the entire Geely group market share is miniscule compared to Toyota.
One way to say…yup i will increase the car price.
What is interesting is the statement from the vendors say the relationship is strained by the fact that Proton sources from China. Surely MITI’s industrial linkage programme takes care of these matters, meaning Proton must commit to localisation within a fair period for each of their donor car models?
i have worked in a company with headquarter/parent from the same country, no exceptional, they will always want to source from own country, R&D too by using tonnes of excuses.
It’s not that the Chinese duwan to sapot lokal but everytime they wanna r&d, have to go kantin look for the engineers keluaran uitm & mara. If happen to you, tak panas ke?
Many vendors supply parts for are multi brand PROTON PERODUA HONDA assemblers
A vendor ricebowl depend only on PROTON orders deserves to be Lingkup. LingLong tyre cheaper than Goodyear.
Why you have to rub salt into our wounds?
Go ahead with your Linglong trash tyres. Cheaper does not mean better LOL. Dealing with CCP Chinese will always be bad.
China company what do you expect? Technology transfer? local model enhancement? Jgn mimpi lar…
You poor you bankrupt you die your own problem! None of the China EV is locally assembled also. All they want to $$$ back to China.
i thought omoda E5 is going to be locally assembled in Q2
Sapot china = sapot Palestine
Local suppliers can’t meet the KPI and SLA set by Saga.
Potong sell loads of crap, no doubt. But, those numbers are mostly on low end models. How many idiots would take out a 9-year loan for a RM100K Potong?! Orders are obviously low for overpriced Potong. As for those 500,000,000,000 Malaysian workers, is it fair to ask poor rakyat to overpay for shit cars to remain patriotic?
Imagine 50,000 workers across the automotive supply chain. 33 million of us have to bear the cost of expensive cars due to protectionist policies so that 50,000 people can have jobs. Eff this industry, buying a car in Malaysia is basically doing charity for basket cases.
We’ll take 9 year loans. Heck, bank offer 11 years also we take. Barulah tak malu balik beraya. Hutang dulu bayar kemudian. Abang tarik kete, tolong kasi chan ye…
OK time for free market, no more excise duties for imported vehicles.
Dream on! Considered yourself lucky we didn’t increase SST to 10%
Awith the press release, we are no better in understanding what’s the issue. All empty statements.
Did Proton indicate/ commit a volume that they didn’t honor? And at a result, got a cheaper price bcos they inflate the volume projection?
Or was the supplier just couldn’t adapt to the proton production and proton has the right to source for more reliable suppliers, even if it means from overseas?
They will show letters they award to local vendors but they will also buy from overseas vendors for same product. Matter of percentage share they buy from local and overseas. Old tricks.
Our original proton vendor already faced this cost issue due to low economic of scale. Even with Chinese vendor setup business in tanjung malim now faced the same challenge.
Proton’s sales is not enough to sustain a competitive costing for it’s vendors. Proton export still very low. Can’t seems to expand proton total volume.
Just compare: MY got minimum wages, electricity keep going up, imported materials subjected to tax, excise duties or all sorts, amortisation with small volume. CN labor is cheap, subsidised electricity, Proton import with no tax, etc. They have huge volume, they can get bulk discounts.
One does really condemn these vendor cronies for giving us sub par quality since the inception of Proton just to make maximum profit at the expense of majority Malaysian over the years.
Seriously la if you cannot buck up then just get out stop wasting Malaysian tax payers money, probably general Malaysian won’t even mind that since until today you give us the broken door X50 handle and the Burning engine for X70 which until today no response. And some even dare to not provide evidence for the issue like his Mamak father company.
The vendors should ask themselves why Proton not ordering from them. A giant vendor like APM also cannot produce quality absorbers for x70. Many owners complained of squeaky sound until Proton replaced with made in China absorbers. In global economy if cannot compete in quality, speed and price might as well just sell nasi lemak.
Boikot Proton, buy Perodua.
Always asking for help. If Geely didn’t rescue proton, the fallout will be worse. Every time news in Malaysia is assistance not given to businesses.
Have you guys heard China car but parts made elsewhere? This situation is already there even when the ink haven’t dry after the Geely bought over.
Be competitive.
Feeding these leech companies that’s why Proton forever cannot make profit previously.
MITI officers should get out of their offices and go and find out what’s going on, and solve the problem.
The notion that Proton is a national car is a myth. It is not, as it is a subsidiary of a China brand. Toyota and Honda assembled in MY are no different than Proton and shall be accorded with the same tax treatment. FYI, the real national car was sold by Tak Malu Boss. Suprima, Exora, Saga, Persona and Iriz are testament to local engineering capabilities. X70, X50, S-what are not.
stop paying commision to the mahatahi dynasty. Its already 40 years… and now that dynasty is being invesitgated.
Use this exceuse and stop the commision to the dynasty