Proton launched the Proton Persona in Egypt last week shortly after the model’s launch in Saudi Arabia, and these launches will be followed by a series of launches in Oman, Qatar, Bahrain and Syria over the next two months.
Egypt has a population of 80 million and annual car sales in the country currently stand at 200,000 units a year, with the potential to touch 500,000 units soon. Proton first entered the Egyptian market in 2001 with the Proton Waja and the Proton Wira, and then launched the Proton GEN2 in 2006. The marque is distributed in the country by Alpha Ezz Elarab Co.
They have since sold about 5,500 cars in Egypt since 2001 which is less than 100 cars a month. Proton’s total exports to all 24 export countries including Thailand, Indonesia and Singapore currently stand at 2,000 cars a month. The company is also exploring the possibility of setting up a CKD assembly plant in Egypt which could be an assembly hub for the growing northern African market consisting of countries such as Morocco, Sudan, Algeria and Tunisia.
Despite increased international sales, exports are still a loss-making operation for Proton right now. The recently unveiled Q2 2008-2009 financial year results revealed that Proton made a loss of RM2.9 million for Q2 2008 for export markets.
The Q2 2008-2009 results also revealed that Proton had spent more money making cars (1.839 billion) than it earned selling them (RM1.838 billion, probably because of marketing efforts and the R&D costs of the new Proton MPV), but profited from RM53.4 million ringgit in “other operating revenue” which consists of activities such as aftersales.
Click here to read the full financial report.
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now that’s tough. how do you break into larger volumes? what are they competing against in egypt??
Is the report correct…after all these years and despite exporting to so many countries and not making a profit on exports…all we are selling is 2000 units per month…why bother. The numbers are small (less than 2% of total sales) and still not making money???
profit from after sales operation ? …mmmm looks like they are making faulty cars and made money from ‘fixing’ it
From the balance sheet, Proton’s financial position looks healthy based on low gearing and good liquidity position. The only matter is that it is operating at a loss. Perhaps because the poor economics of scale & limited local demand.
Every company has to endure loss at some time before climbing up to break even and make profits. Just give DSZ a chance. Proton’s only option to grow is through export markets, and that will be the main direction for a long time to come.
If they can achieve 200 cars per month sales in Egypt, that would be a good start. Although its rare, it does make some presence. Just like Mazda & Peugeot cars here, selling less than 100/month, but still quite often that we see them on our roads.
Have been to egypt quite a few times. gotta say, proton cars are kinda popular there.
go youtube and search for proton drift in egypt. ;)
http://www.youtube.com/watch?v=TaGXHnM6BZw
Please take note that, proton spend more money making cars then it earned selling them because of few reasons:-
1) the money spend making cars include the new model development costs which could mount up to few hundred million…currently the mpv…
2) the mvf plant is being refurbished to accomadate the new mpv, so thats another extra cost.
3) other costs also include the use of consultants since we wanna the development time as short as posible.
4) the profit margin for the current models, such as saga and persona has very low profit margin since the it is sold cheap.
so in order to make money, DSZ has smartly, utilized all its subsidaries and child companies to make money, like Edar, Lotus, etc etc…
In order to make money by selling cars, DSZ has decided to increase volume rather then opting higher profit margin, thus coming up with plans as described above, since the local market is already quite saturated.
The reason why the export market is still maintained eventhough its making loss, is to establish the brand in the countries…so that in future they could go mass…
managing a multinational company is not as easy as going to the shop and bargain the price, buy it and forget it….wat i meant is, that u can make decisions just for that instant, because u want profit. We have to look at long term investment, market capture, establising the brand and so on. Thats external, internally, u have tons of issues to worry about and to maintain or improve. So managing a company is not easy as like u can sit at the mamak shop and debate and decide. It needs carefull planning, timing, market study, and so on, so on….I think our MD is doing hell of a great job since he has briefed us about the future of Proton and we have full confidence in him…hope other malaysians also do support him also…maybe for now its abit vague, in another few years, it will be clearer to the public, where Proton is heading….
Cheers!
Correction…
“wat i meant is, that u can make decisions just for that instant, because u want profit.”
It suppose to be,
wat i meant is, that u cant make decisions just for that instant, because u want profit.
thanks for the explanation si-fu… but some ppl may still like to condemn… huhu
Why spend so much, just buy SAAB for US1 buck wahlar you got turbo technology nice car and Mat Salleh Enginner.
I applaud them for being ambitious, but well, if its only selling 2000 cars total per month in 24 export countries, I wont be surprised if they were loosing money. (Foreign sales offices are expensive to maintain)
The thing is, Proton still doesn’t (or will ever) have any competitive advantage to “Start”, unlike the Japanese and Koreans before them. Its going to be a difficult time for them, and its going to get worst as global spending is still taking a dip.
And to think they get better optioned cars than we get locally.
But really, is there any reason for anyone outside of malaysia to buy a proton?
Some people find reason not to buy them in Malaysia.
“other operating revenue” This is very fishy, as in Malaysia a lot of P & L can be twist and turn..
Sorry no offense, for Proton now is they need foreign support.. If they dont think ahead for another 10 years, i think they will be in deep trouble.. In US, after 2010 they will need every car to have standard stability control (VSC, ESP), ABS and 4 air-bags (front and side door), if i not mistaken.. Europe will be also following.. If Proton always think China, Asean and other middle-east country will always buy our car, think again.. Do you think China car move as our Proton pace? They are running not walking like our Proton doing.. China now is producing a lot of cars from European cars to US cars, so if they mastered both these technology. Imagine what they can do another 5-10 years?!? Even MG rover are theirs!
MPV will be a big hit due to better pricing and spec compare to other competitors in the market due to Tax and AP, but other country sales revenue how? It is good to made money from own people, but it will hard to grow big if big % is from recycle money (own country) (Toyota earn more money from foreign market). It is good that Proton is moving, but the problem are they moving fast enough to catch up China or even India (TATA) pace if we only have lotus alone?
I think Proton will need another stronger partner to move it faster and better technology. CKD is a good move, but for how long?
Mr. sifu,
i’ve read a few comments at carsurvey.org about proton cars.. the egyptian’s said that an authorized proton car dealer, “Alpha Ezz Elarab Co” won’t let people to test drive drive any proton cars… they also say a bad thing about proton cars which mean they are condeming the cars…. this is what have they say about 1st batch of gen2, “in 1 month, u need to change alots of thing.. 6 months u need to change half of the car and after 1 year, u need to change the overall car”… yes, we can’t deny that 1st batch of Gen2 was lack of quality especially for interior… (correct me if i’m wrong with the statament above)
My questions is, why did proton still trust a dealer like this? that happen before their sell the car but what will happen after sales and services? can they give a support as what consumer expected? can they rectified the problems and solved it?
I’ve a few online friends from Egypt (just chatting online), all of them said a proton cars was very famous in there.. But proton must change their an authorized dealer before “Alpha Ezz Elarab Co” ruins (merosakkan) an image and sales of proton cars in Egypt as now we know that Proton had improved their cars quality… if that rumours was true, u got to do something before proton collapse in that very pontential market….
p/s: i’m not trying to spread a rumour but just to share an information.. and again, correct me if i’m wrong.. (sorry for my bad english :D )
aenz81, there might be some truth in wat u say, since we need to think practically…thats why the management is constantly trying to improve things…it is quite hard to get a local dealer in a particular country if the brand is not well known and established there…so thats why the management is trying very hard to make a ‘presence’ in terms of branding, to let the people know who Proton is…it is quite hard to do as there are many established marques like toyota, honda and so on. It will take some time but eventually we will get there….
cheers!
ok sifu, good to hear that… i hope that proton will success to “presence” their brand in that country… as what my egyptian’s online friend told me that “chery” is doing badly in there after one of chery QQ involve in a accident and the car was badly damaged, the driver and passanger is died on the spot.. that incident already creating a bad image about that brand..
they also said that, if their wanna buy a car, they will try to buy proton and try to avoid japanese cars.. this was the FAQ that always their ask me..
1) when will savvy entered their market? they said that savvy was a very good looking car.. cute..
2) how about Gen2 CPS… will proton launch that car in egyptian market?
GREAT JOB PROTON!!! 2000 EXPORTS EVERY MONTH OMG WHAT AN ACHIEVEMENT!!!
This is 24,000 exports each year! I mean, we can feel so proud that our national car company can give 24,000 people some chance to drive our “wonderful” Gen-2, Sawi and 7 years old Waja.
I would be even more proud if, you know, even the likes of Chinese car company like Chery didn’t manage to export 180,000 cars this year alone!!! You know, that Chery, only founded in 1997, in existence for less than 10 years unlike our Great Potong with 23 years of history (of producing crap, but damn we sure are proud that at least is OUR crap, not others!). Chery which has already produced 4 SUVs/MPVs while Potong still struggling to debut even one!
I am not trying to promote China cars, and I won’t even buy 1 if offered, but this is what can be call PROGRESS at least, unlike some Potong fanboys getting all excited over selling a handful of cars in Thailand and Egypt and thinking it is “progress”. Other companies in less than 10 yrs achieve 10x more than what Potong achieve in 23 years la dey.
Wake up and smell the coffee. Potong will never amount to anything more than a national shame and a monument to one man’s ego.
sifu…no need to layan that ah beng…
because he ‘know and already know’ proton better than you..haha
i think near this time that mpv design and neo cps will be confirmed rite?
before entering manufacturing stage…
shut up… not_ah_beng,,,
haha… just trying my words… no offence eh, not_ah_beng…
last time we talk about progress… then u say proton doesnt have it…
when Proton show the progress to u, u talk about others… weird la…
by the way, thanks for ur love and ur concern again… hahaha
owh again.. u said chery in progress but u dont want to buy one… so, whats the point talking about it?
this may be out of topic :
I was watching CNN the other and Michael Moore (film producer/human rights activist) was commenting on GM bailout request, anyway what caught my attention is that what he propose for GM :
1) agree for bail ONLY IF govt has full control over GM (remove the current mngt) with better mngt governance & transparency etc
2) GM to build cars that consumer need
3) propose to govt to modify the business of GM to build national interest vehicles (eg : trains, buses, trams etc as an alternative mode transportation for the general public at a long term)
point 3 was very interesting, i wonder if proton can actually modify their nature of business to build other transportaion vehicles other than car. as we wonder how relevant are cars in next 10, 20 years?
What progress did they show? Export 2000 cars a month is not call any significant progress. Especially after being in existence for 23 years and spending billions of taxpayer money. And also having protectionism to safeguard their homemarket in the last 23 years.
And as for chery, to show “progress” doesn’t mean I must buy their vehicle! At least not right away. They has some faults still but have come a very long way compared to Potong in its 23 years of existence. If they continue along in their present rate of of progress, in another 10 years, I’m sure I will reconsider.
Also, I notice you never acknowledge the actual point of the comment – that Potong progress in 23 years with only 2,000 car exported per month is pathetic.
As some others have commented, 2,000 exports per month, can’t even cover the cost of maintaining foreign dealership, service centres, etc.
ya la2… u win… so?
IF YOU Look at Utusan Malaysia or Berita Harian i cant remember… The CEO told that they are developing CAMPRO Turbo 1.6cc tht will be equivalent to 2.0 cc and will be launch in 2010. So this is confirm already…damn i cant wait for this. haihsh another 1 year plus..heyyyy faster laaa NEO CPS..i want it i want it!!!! come on Launch on early January laa !!!!!!
only real granfather fuckers from egypt buy this car
ALPINA Burkard Bovensiepen GMBH + Co. KG whats wrong with any egyptian that bought Proton cars? We should be proud that eventhough they have enough money to buy a more expensive car, they choose proton over other exclusive/ expensive cars.
Plus.. if they wasting their money buying proton, its not ur problem right? not like they’re using ur grandfather/grandmother or ur money right?
or ur just jealous that they choose proton over your proud Alpina?
most of you guys got it wrong. These ‘newspaper facts and figures’ are only there to justify them having a tax advantage in malaysia (which happens to be thier only money making scheme). i do not trust the figures they are providing us with.
I not so sure whether P1 makes the right move at the wrong time .
If later you rugi in Egypt, the mummies wont help you.
If you come back to Malaysia to beg the G to get some money for you, we will boycott you.
ALPINA Burkard Bovensiepen GMBH + Co. KG said,
December 3, 2008 @ 2:02 pm
only real granfather fuckers from egypt buy this car
*********
than, what is ur point? there still buyers…
autojohndoe said,
December 4, 2008 @ 2:22 pm
ALPINA Burkard Bovensiepen GMBH + Co. KG said,
December 3, 2008 @ 2:02 pm
only real granfather fuckers from egypt buy this car
*********
than, what is ur point? there still buyers…
————————————-
the point is those people are really people you should avoid at all times. most probably some terrorist
To ALPINA bla bla + bla bla..
“grandfather fuckers” its like a man fucks a grandfather.. wtf? dun say ppl like dat r … n then some more call em terrorist and so on..if so they attack u la then good because u r the fucker one giving nonsense comment.. heheh