Proton dealer consolidation to cost RM100 million

ProtonProton wants to trim its 290+ dealers down to 180 dealers, but they say the consolidation process will cost RM 100 million. Last I heard Proton offered RM 300,000 per dealer, but a simple calculation shows 290 to 180 dealers for RM 100 million is nearly RM 1 million in costs per dealer in a dealer Voluntary Separation Scheme program! Nothing is finalised yet as Proton Edar is still in discussions with EON on how to consolidate their dealer nework.

Why did Proton approve applications of too many dealers and cause this over-congestion in the first place? Where is this RM 100 million coming from – Proton or taxpayer money yet again like the previous RM 10 million given by the government for the first round of dealer VSS? Proton got snubbed by dealers when it first offered RM150k per dealer because the offer was said to be too low, so this increased to RM300k.

Why should dealers that don’t meet performance expectations get a safe exit? Shouldn’t they have conducted adequate studies on their own on whether there is enough demand in the area they are opening the dealership in to sustain the operations?

Source 1, Source 2

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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

  • KKTE (Member) on Feb 11, 2009 at 8:56 am

    No offence guys, in my opinion, the best decision would be just end proton. Well what i mean is, proton had brought only chaos to our malaysia car market. Due to proton, our foreign car taxes had to be so high to support proton. The best thing is just end proton, and lower our car taxes. Now thas a real solution.

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  • biggie (Member) on Feb 11, 2009 at 9:01 am

    As the first to comment.

    The lopsided agreement + too many dealers are leftover of EON dealer network to be usurped by Proton Edar. Those are agreeement signed during Anwar era where Malaysian got the 1st taste of high tax for cars.

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  • MyviKiller (Member) on Feb 11, 2009 at 9:10 am

    What a big mess it used to be, wasting money (or rakyat’s money). Sifu can clarify this?

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  • KKTE (Member) on Feb 11, 2009 at 9:11 am

    Its not a good taste though.

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  • common-sensor (Member) on Feb 11, 2009 at 9:12 am

    Whats the fuzz bro? Malaysia > Bolehland … when politics overrule professionalism, anything possible maa ..

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  • BanyakMasukWorkshop (Member) on Feb 11, 2009 at 9:17 am

    KKTE said,
    February 11, 2009 @ 8:56 am

    No offence guys, in my opinion, the best decision would be just end proton. Well what i mean is, proton had brought only chaos to our malaysia car market. Due to proton, our foreign car taxes had to be so high to support proton. The best thing is just end proton, and lower our car taxes. Now thas a real solution.
    ________________________-

    what do you think will happen if you close proton down tommorow? its easy to say it, but to actually do it, would be extremely difficult.. or are you just thinking of yourself coz you think that you will then be able to buy some fancy sports car, or performance saloon for RM80k? dont forget, if you were to close down proton, you’d probably have to shut down all the other national car makes(perodua, naza, inokom…), as they also enjoy the tax status afforded to them.

    all these things are “legacy” issues imho. just part of the stuff that the proton today are trying to clean up.. like the old MV Agusta thing, and who knows what else that were ill conceived, and ill planned by the previous management.

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  • kemosabe (Member) on Feb 11, 2009 at 9:23 am

    Its a matter of the Government doing business with the people. This sort of scenario happens when the people “allow” Law Makers do business. Look around you, there is none or very little people’s voice or power, and this is what the Government has successfully(suppressed) done over the past 50 years.

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  • WilliamSmith (Member) on Feb 11, 2009 at 9:25 am

    The beauty of the existing government and its related companies is how “RISK FREE” business they’re giving out to the favorable ppl. Just look at the Toll business and now here comes the Car business. I am sure there’ll be more to come because for the government, their stimulate program for the economy now is to stimulate those favorable ppl while the majority of the Malaysians have to stimulate the economy outta their own retirement funds. The government supposed to be the elected ppl who help to “manage” the citizens’ contributions so everyone can enjoy the growth together. Is it the case now? Why are we still letting them sitting on their seats and wasting the taxpayers’ monies?

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  • waja2000 (Member) on Feb 11, 2009 at 9:31 am

    The Edge Financial Daily that there are currently 294 dealers and branches. The breakdown is as follows: 157 Proton Edar dealers and 31 Proton Edar branches, and 66 EON dealers and 40 EON branches.
    ________________________________________________________________
    i think proton will try to close down Eon & branches dealer first.
    And cost maybe need 100Milion, i think at lease take 2~3 year to achieve target 180 dealer, and cost will break to few financial year.

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  • NA (Member) on Feb 11, 2009 at 10:04 am

    Just close more branches and leave more business to dealers. I don’t see branches sales personnel is fighting as hard as the dealers. Try go to any Proton Edar branches around you. See if you could get a test drive of any car that you wish.

    Once branches close down to 20 each nationwide… they’ll save al least 30-50 million overhead a year with only initial spending of 10 million for employee VSS. And Finally, let market decide whether dealers have any good sales record to demand as high as it is now. All this while, dealers has position themselves too high in Proton organisation.

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  • krypto (Member) on Feb 11, 2009 at 10:08 am

    hmmmm…as i’ve posted on the previous similar topic..this prob arised coz Proton is too greed. EON already got 24 years of experience in distributing Proton cars..Instead of establishing a different entities (Proton Edar) to distribute vehicle directly to dealers & buyers, they can always acquire EON and manage EON like they want it to be…it’s all started with DRB-Hicom…from USPD to Proton Tiara..nope, DRB tiara..hehehe…its not

    Closed Proton?? that was the most stupid idea i ever heard..no offense but plz remain silent k..Its not proton who caused the chaos..the idea of developing a national car is the most brilliant idea ever exist..it not only create cars, but also job opportunities, businesses, training ground, etc…please do research before spitting out ur excellent opinion..(psss…check out the background of Perodua tov level management & engineers)…

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 10:27 am

    Other car makers don’t give VSS to terminated dealers.

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  • BanyakMasukWorkshop (Member) on Feb 11, 2009 at 10:32 am

    maibatsu_thunder said,
    February 11, 2009 @ 10:27 am

    Other car makers don’t give VSS to terminated dealers.
    -______________________________________

    still better to be an imported car dealer.. at least you can still get AP’s ;)

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  • BB (Member) on Feb 11, 2009 at 10:33 am

    its just another version of gov high-way contract. when good time, every body win-win. when bad time comes, gov or rather to say rakyat is the looser!

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  • Livina2008 (Member) on Feb 11, 2009 at 10:38 am

    It’s really a joke to give VSS to dealer. Proton is giving “exclusive” dealership to these ppl. Why on earth is the need for Proton to give them VSS? I just can’t understand the logic of this arrangement.

    The project of nasional car is actually great BUT it has been managed by the wrong ppl for the past 23 years (Proton is established in 1986 if my memory serves me right). Please get some talented ppl to make some great changes in Proton. Even Nissan got a foreigner to fill its top post, why do we still hold on to our ego to let only Malaysian to get the top job?

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  • adil2008 (Member) on Feb 11, 2009 at 10:39 am

    Proton should plan closing the dealer step by step, but more important is “NO TAX PAYER” money will flow in. IT”S not our tax payer business.

    And i already monitor this “BanyakMasukWorkshop” quite sometimes, my commend is he/she like to copy and paste the other guy commend to give some stupid commend or opinion. stop it. everydoby have a right to commend, and you think who you are? headmaster? teacher? lecturer? police or other stupid G officer?

    Adil forever.

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 10:48 am

    Look at it this way. Malaysia has over 500,000 units per annum in sales. This is very significant with the majority being passenger cars. Malaysia SHOULD have been the passenger car manufacturing powerhouse of ASEAN and not Thailand, for so many reasons – manpower, comprehension of English, ports, etc.

    However, from an investor point of view, there’s no clearly defined 10 year roadmap for the auto industry in terms of emissions and duty structure. These two items, among other things like economic situation, highway development, etc. are critical for any planning and investment.

    What’s the stumbling block? Is it Proton? Malaysia once adopted the Penal Code from India. Again, in this new Millenium we’ve got to study two things. One is the Automotive Mission Plan of India, and in order to put things into place the Malaysian Govt. must let go of Proton, not to fade to oblivion as some here have said, but in a proper way. The best case study for this is Maruti Suzuki. It started out being a govt. project, with Suzuki input (26%) and equity. The Govt of India realised it had no place being in the car business and slowly but surely released equity to Suzuki Motor Corporation (Japan) which now holds 54.2%.

    The results? Employment, vendor development, dealer development, technical training, manufacturing tech transfer, one of the best Top Mark style reselling networks in the world (True Value) and all that (too many to list – check http://en.wikipedia.org/wiki/Maruti_Suzuki). The government’s objectives were achieved and Maruti Suzuki became a company which holds the #1 position in India, and is Suzuki Motor Corporations largest passenger car market in the world.

    Their markets are wide open now, and all other major carmakers are in, but Suzuki still holds the #1 spot with small cars which the general population can afford. Malaysian Govt/Proton, please ‘Look West’.

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  • krypto (Member) on Feb 11, 2009 at 10:50 am

    i agree that it is not cost-effective to give VSS to dealer…what for?? but, if the dealer is performing well not only in selling cars, but also provide high customer satisfaction, quality delivery, follow the guidelines provided by Proton, cooperate with strategic planning set up by Proton, there’s no reason for the dealership to be terminated rite..

    i believe the VSS is given to pay back what dealers have invested.. remember, dealers also are stakeholders and spent huge amount of monies to get involved in this business..just look at Ingress, the sales showroom, service facilities & parts are not free, rite?..in other words, its not fair la bro…my 2 cents

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  • rt (Member) on Feb 11, 2009 at 10:57 am

    I think calling it VSS creates more confusion. It should be called separation compensation.
    You see, if I applied to be a dealer, and approved, I might have to pay Proton and invest certain amount to startup the business.

    Then if I failed run a profitable business, I will close down. No question about it. There are a lot of EON and P.Edar dealers that had closed down.

    But how about those dealers who did not get plenty of clients but enough to run their business and pay their staffs, and to fulfil Proton’s sales quota (if any) ?
    Then it would be not fair for them to be axed out without compensation.
    At least it could be used by the dealer to pay out retrenchment benefit for their staffs.
    Then Proton, since it had already appointed the dealers have the obligation (moral or legal) to ensure that the dealers can make a clean exit.

    Think yourself in the dealers position?..

    just my 2 sen

    .

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  • White Jack (Member) on Feb 11, 2009 at 11:02 am

    I don’t undestand this.. is it corruption or what ?
    Why need to give VSS to dealers to close down ?
    If Proton set a sales target to be meet, the dealers have to work hard to archive that. If poor sales result, the dealers are supposed to close down and give up by themselves. What a joke, no business somemore want others to pay them big sum. This kind of business model only happen in Malaysia or what ?

    I can only smell corruptions if they pay, the only explanation will be the dealers are mostly their business counterpart adik-beradik, saudara-mara, royal family’s uncle auntie, kakak ipar’s brothers, sister … bla bla..

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 11:07 am

    I believe BMW, Honda, Naza Kia, Perodua, AutoConexxion, Torino Motors, Sime-Hyundai, Tan Chong, UMW-Toyota, Mercedes-Benz, etc. all do not pay VSS to terminated dealers.

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  • krypto (Member) on Feb 11, 2009 at 11:10 am

    “I can only smell corruptions if they pay, the only explanation will be the dealers are mostly their business counterpart adik-beradik, saudara-mara, royal family’s uncle auntie, kakak ipar’s brothers, sister … bla bla..”

    some of them are…

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  • fastcx (Member) on Feb 11, 2009 at 11:18 am

    too many assumption flying around here, when it’s finalized, read newspaper la! dont assume this n that here n go out spread rumour! I don’t understand this lah..is it typical malaysian habit or what?

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  • krypto (Member) on Feb 11, 2009 at 11:26 am

    “fastcx said,

    February 11, 2009 @ 11:18 am

    too many assumption flying around here, when it’s finalized, read newspaper la! dont assume this n that here n go out spread rumour! I don’t understand this lah..is it typical malaysian habit or what?”

    my 2 cents are not based on rumours, i’m in the industry myself!! i know what its like..and since when the newspaper are 100% factual & true?? u have a choice not to read & believe what being discuss in here…as a matter of fact, at least we got the guts & brains to discuss the matter..& we are not fighting or ripping each other flesh apart..ignorant brat

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  • not_ah_beng (Member) on Feb 11, 2009 at 11:37 am

    LOL.

    More Potong sucking the rakyat’s money. This somemore at a time when Potong’s majority shareholder, Khazanah, just lose RM18 BILLION due to economic crisis.

    So who pay for it, you and me. Accountability? Zero.

    But no doubt some Potong fanboy and salesman will defend. Why? Can collect 1 million Angpow maaaa………..

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  • tokmoh (Member) on Feb 11, 2009 at 11:41 am

    adil2008,

    Funnily, u dun seem to realise ur act of monitoring n scolding BanyakMasukWorkshop is like a “headmaster, teacher, lecturer, police or other stupid G officer”.

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  • aenz81 (Member) on Feb 11, 2009 at 11:49 am

    BanyakMasukWorkshop said,
    February 11, 2009 @ 9:17 am

    KKTE said,
    February 11, 2009 @ 8:56 am

    No offence guys, in my opinion, the best decision would be just end proton. Well what i mean is, proton had brought only chaos to our malaysia car market. Due to proton, our foreign car taxes had to be so high to support proton. The best thing is just end proton, and lower our car taxes. Now thas a real solution.
    ________________________-

    what do you think will happen if you close proton down tommorow? its easy to say it, but to actually do it, would be extremely difficult.. or are you just thinking of yourself coz you think that you will then be able to buy some fancy sports car, or performance saloon for RM80k? dont forget, if you were to close down proton, you’d probably have to shut down all the other national car makes(perodua, naza, inokom…), as they also enjoy the tax status afforded to them.

    all these things are “legacy” issues imho. just part of the stuff that the proton today are trying to clean up.. like the old MV Agusta thing, and who knows what else that were ill conceived, and ill planned by the previous management.

    —————————————————————-
    Well said BanyakMasukWorkshop ;)

    And KKTE, why don’t G closed (bungkus) Toyota, honda, Nissan and more others foreign cars autorized dealers in malaysia and send back their cars back from where it’s belong.. then G will cut the national car taxes and asking our national car manufacturers (proton, perodua, naza and inokom) to sell tax-free-high-quality cars to malaysian fellas.. how about that?

    Closed proton and lowering foreign cars taxes will effects our economy of scale when there are sooOOoo many RINGGIT MALAYSIA flow to the other country.. flies away from ur and all malaysians pockets to japan, korea, uk, china? lol..and list goes on, when malaysian are too depending on their vehicles… on that day, G is about to reduced their employees because of “ekonomi merundum”… and what if u are the one of them.. and maybe that was the real solution for “malaysia motoring quality issues” from ur aspect… yeah.. “BanyakMasukWorkShop” is right…sometimes it’s easy to say but hard to done it… :)

    And i really hope that my comment will appear just right on time, huhu…:D Paul, letih mau taip woo… ;)

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  • krypto (Member) on Feb 11, 2009 at 11:58 am

    IMHO, this is investment..calculations are made to minimize risk & loss..sometimes u gain & sometimes u loss..n i still wonder where are the voices & shouts when they gain profits…hmmmmm

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  • ericfoong81exe (Member) on Feb 11, 2009 at 12:16 pm

    I think it is the way proton do their marketing….stupid enough for a big corp. Now they have to clean this old day shit away….at the end, who care??

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 12:23 pm

    I wonder if Ramly Burger pays out VSS to failed burger stalls.

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  • biggie (Member) on Feb 11, 2009 at 1:29 pm

    read what krypto have written, the cost being paid is to streamline dealers and not actually to weed out dealers. So those dealers deserve their compensation.

    who pay for it? you and me?… nope Proton according to their balance sheet, and the monies do not belong to you and me, as they paid their due taxes like you and me.

    And yes BMW, Honda, Naza Kia, Perodua, AutoConexxion, Torino Motors, Sime-Hyundai, Tan Chong, UMW-Toyota, Mercedes-Benz pay compensation for termination of dealership.

    Paul Tan says: Not Proton, but you and me. The first round of compensation money came from TAX PAYERS as government gave them RM 10 million for purpose of dealer VSS.

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  • GOGOobama (Member) on Feb 11, 2009 at 1:38 pm

    lets us boycott PROTON … go for import car maker ….

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  • bmpower (Member) on Feb 11, 2009 at 2:01 pm

    it’s proton with proton edar.
    proton edar is ‘a department’ of proton.
    so they deserved a vss.

    but not EON .

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  • bmpower (Member) on Feb 11, 2009 at 2:04 pm

    yup.. if in term of ‘termination’ of dealership contract, they have to pay. Unless the contractor breaking the law or contract aggrement. In this situation, it’s posiblity for they have to pay to the dealership.

    aiya.. law is soo complicated.
    that’s included perak’s crisis. :D

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  • not_ah_beng (Member) on Feb 11, 2009 at 2:11 pm

    @biggie:

    “who pay for it? you and me?… nope Proton according to their balance sheet, and the monies do not belong to you and me, as they paid their due taxes like you and me.”
    _______________________________________

    Actually, you and me does pay for it.

    Who owns Potong? Khazanah. If Potong make profits or losses who gets/pays the monies? Khazanah. If Potong mades stupid, wasteful decisions like purchasing (and selling off) the useless Augusta or giving RM1mil to each of their dealers who ends up paying for it – or at the least, earning less on their investment? Khazanah.

    Khazanah is what? investment arm of G of Msia.

    Invest with whose money? Yours and mine taxmoney? Country’s oil money which is own by all Malaysian and not UMNO? You got it.

    Anything else to add?

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  • 4G63T DSM (Member) on Feb 11, 2009 at 2:40 pm

    Part of the Government stimulus plan?

    I’m sure lots of these goons would be expecting quite a big ang pow after the government announced the plan to “stimulate the economy”.

    The failure of Proton (and its support) is because it is government linked and protected (say what you will, but if your major investor is the government, the government protects you as it protects its interest). The management of Proton is politicised and infused with race based discrimination (try being a non bumi company and see how far you’d get with Proton supplier network). Proton’s failure is in due to GREED. Burnt customers remember well.(remember the mandatory GOVERNMENT APPROVED “optional” side stickers on wiras? and shoddy parts?).

    It never took the opportunity to grow and fix what needs to be fixed because there was no risk to underperforming.

    for the sake of balance, this is no different than what is happening in the US, but then again, the difference is, its one thing to bail out the automakers, its a different story to use public money pay/rid off dealers once the cash cow has died.

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  • kamisama-alex (Member) on Feb 11, 2009 at 2:43 pm

    Instead of closing Proton and get thousands of people jobless, I appeal for Proton to court in a life-partner. I am sure VW will be more than happy to join the family provided they are being given the power to change the business accordingly (for the betterment of everyone).

    One should not mix the business with pleasure, politics nor relationships. By doing so, you’re only courting continuous failure.

    History never lies, the Proton management needed to be ctrl + alt + del (revamped/changed for good). They have proven to be inefficient and a waste of time and money. They pose no value to the country and rakyat and set a bad example to the world!

    Their so call “everyone can afford a car” is a bad strategy. They shouldn’t offer cheaper cars at the expense of quality and technology. I am sure you read papers, few cars collided, some died and some minor injuries. Look at their cars, i am sure you know what i mean.

    Also, by driving low-tech cars, we tend to use more fuel. Maybe “someone” should look at the real factor that contributes to higher fuel usage before talking nonsense like too much subsidy! The one who creates the most problem is the one who complaint the most. They never realise that, they are the main contributing factor! and they are affecting others!

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  • krypto (Member) on Feb 11, 2009 at 2:52 pm

    “not_ah_beng said,

    February 11, 2009 @ 2:11 pm

    @biggie:

    “who pay for it? you and me?… nope Proton according to their balance sheet, and the monies do not belong to you and me, as they paid their due taxes like you and me.”
    _______________________________________

    Actually, you and me does pay for it.

    Who owns Potong? Khazanah. If Potong make profits or losses who gets/pays the monies? Khazanah. If Potong mades stupid, wasteful decisions like purchasing (and selling off) the useless Augusta or giving RM1mil to each of their dealers who ends up paying for it – or at the least, earning less on their investment? Khazanah.

    Khazanah is what? investment arm of G of Msia.

    Invest with whose money? Yours and mine taxmoney? Country’s oil money which is own by all Malaysian and not UMNO? You got it.

    Anything else to add? ”

    can i add? of course la its our money, its also my grandparents money, my parents money, uncle, auntie etc etc etc… one of the purpose of investment are to make that money work for u, which is to create more money…investment are like gambling, but the largest differences is we calculate the risk, return, loss, gain and so on (correct me if mistake)…why do u regards paying separation scheme/VSS to dealers as a loss? are u part of the thinktank & already make enough research to claims that it is pointless to terminate the dealership? who knows, by terminating the dealership more opportunities can be discover, more control by Proton towards the dealers, higher service quality??

    Guys, damage have been done…what they are trying to do rite now is to minimize the long-term effect of the damage and to seek for better path of doing business..remember, Proton is just not a car..its the dignity of the nation (our money too :-| ) ..and i still strongly stand behind opinion, unless someone can give me a really good reason why i should not…cheers!!

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  • MyviKiller (Member) on Feb 11, 2009 at 2:52 pm

    GOGOobama said,
    February 11, 2009 @ 1:38 pm

    lets us boycott PROTON … go for import car maker ….
    —————————————————————-

    If my father print money then no problem la…

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 2:53 pm

    biggie – “read what krypto have written, the cost being paid is to streamline dealers and not actually to weed out dealers. So those dealers deserve their compensation.

    who pay for it? you and me?… nope Proton according to their balance sheet, and the monies do not belong to you and me, as they paid their due taxes like you and me.

    And yes BMW, Honda, Naza Kia, Perodua, AutoConexxion, Torino Motors, Sime-Hyundai, Tan Chong, UMW-Toyota, Mercedes-Benz pay compensation for termination of dealership.”

    No Biggie, you’re absolutely wrong. No car company in the world pays off dealers who are terminated. What’s the difference between ‘streamlining’ and weeding out? Isn’t it just termination? What was in the dealer agreement? Is Proton legally obligated to pay terminated dealers a VSS?

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  • p1basher (Member) on Feb 11, 2009 at 3:00 pm

    Cant they just merge the dealers? Terminate dealers also pay so much, why i dint heard any company pay money to terminate their workers.

    i never heard of if i open small company sell kfc, if my kfc not many people buy i can ask more money from kfc for my compensation.

    wtf! everything also need so much money, spoilt kids are they? If want to pay money i would like the government to pay RM1 to proton to give proton free to toyota.

    “Change G, change Proton.”

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  • krypto (Member) on Feb 11, 2009 at 3:01 pm

    “kamisama-alex said,”

    you are rite but i beg to differ, and no offense yaa…i think complaints are what kept a business or organization to continue growing…outsiders usually sees what happening in the real world unlike the person inside the organization itself…Proton’s CMC & Product Dev Div should really look into these complaints, & create a plan to solve this complaints..but, dissatisfaction are really hard to fill up, especially if its involve the whole country!! ;-p

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 3:31 pm

    Is the RM100 million the ADF expenditure for 2009?

    2006 – RM50 million for consolidation of dealers and the rationalisation and improvement of vendors – http://paultan.org/archives/2007/07/10/slow-take-up-for-automotive-development-fund/

    2008 – RM400 million for vendor development – http://paultan.org/archives/2008/04/18/rm400-million-for-proton-vendor-development/

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  • not_ah_beng (Member) on Feb 11, 2009 at 3:36 pm

    @krypto:

    can i add? of course la its our money, its also my grandparents money, my parents money, uncle, auntie etc etc etc… one of the purpose of investment are to make that money work for u, which is to create more money…investment are like gambling, but the largest differences is we calculate the risk, return, loss, gain and so on (correct me if mistake)…why do u regards paying separation scheme/VSS to dealers as a loss? are u part of the thinktank & already make enough research to claims that it is pointless to terminate the dealership? who knows, by terminating the dealership more opportunities can be discover, more control by Proton towards the dealers, higher service quality??
    __________________________________________________

    1) I agree, money belong to all Malaysian – including your uncle auntie and grandparent, so how come we don’t has a say in how Potong use its money? Even any normal public-listed company have AGM where the shareholder has a vote whats more Proton which public (through govt) has the MAJORITY share.

    Do you think you and your uncle and auntie has a right to decide if Potong management should give RM1mil angpow to their dealers for VSS? I’m sure you do.

    2) Pls la, investment is NOT like gambling ok? If it is, Msia bankrupt a long time ago as in gambling, punter always lost his money. Some bad decisions we could accept but bad decision ALL the time?

    3) Man, if it cost RM1million to VSS EACH dealers I also wan to be a Potong dealer! Easy money man. Car sale is slumping now in Europe and companies closing dealership left and right. Did you see Peugeot or Toyota paying their dealer RM1mil to VSS in Europe?

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 3:46 pm

    OK lets say EVEN under super super goodwill conditions, what could a manufacturer possibly compensate a dealer for?

    – Repurchase of unsold new vehicles at the dealer’s net acquisition cost minus administrative/logistics costs
    – Repurchase of new, unused, undamaged and unsold parts at the dealer’s cost minus administrative/logistics costs
    – Depreciated value of trademarked signage
    – Fair market value of special tools and equipment minus administrative/logistics costs

    How much will all that cost? Does it really come to RM1,000,000.00 per dealer? It would be really interesting to know how they arrived at that figure.

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  • Proton Sagwa (Member) on Feb 11, 2009 at 4:13 pm

    What a joke. NST writes the start-up cost for a Proton dealership can go up to 200k. Those hole in the wall single shoplot dealerships would be far less. Now they want to give them 300k cash!

    Can’t meet the sales targets? Pull the franchise, simple, network streamlined. That’s how every other car maker does it. Don’t come up with some BS about how the dealers are meeting targets and that’s why VSS is needed. If all 290 were meeting targets, there’d be no problems. This isn’t for successful dealerships, this is Proton’s bailout package for its incompetent cronies, given out with other peoples (rakyat) money.

    By the way, according to an Associated Press report the 36 dealers that accepted the first VSS offer of 150k will also be given the higher amount automatically!

    Businesses fail every day and the owners eat the loss or declare bankruptcy. Don’t know why these dealers think they’re so special that they deserve to be immune from any investment risk. Amazed that some posters here also think they’re that special.

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  • krypto (Member) on Feb 11, 2009 at 4:15 pm

    “not_ah_beng said,
    February 11, 2009 @ 3:36 pm

    1) I agree, money belong to all Malaysian – including your uncle auntie and grandparent, so how come we don’t has a say in how Potong use its money? Even any normal public-listed company have AGM where the shareholder has a vote whats more Proton which public (through govt) has the MAJORITY share.

    Do you think you and your uncle and auntie has a right to decide if Potong management should give RM1mil angpow to their dealers for VSS? I’m sure you do.

    2) Pls la, investment is NOT like gambling ok? If it is, Msia bankrupt a long time ago as in gambling, punter always lost his money. Some bad decisions we could accept but bad decision ALL the time?

    3) Man, if it cost RM1million to VSS EACH dealers I also wan to be a Potong dealer! Easy money man. Car sale is slumping now in Europe and companies closing dealership left and right. Did you see Peugeot or Toyota paying their dealer RM1mil to VSS in Europe?””
    ___________________________________________________________________

    thanks for the respond: :-)

    1)i didn’t say Proton should or shouldn’t pay RM1m to the dealers that are gonna be terminated…but do u suggest there are no legal agreements between Edar + EON & dealers? what makes u think dealership can be terminated freely without condition/compensation? its not the same if the contract expired, if that so, Edar + EON can decide whether to continue the dealership contract or not. For example, read today The Star on Scolari’s sacking.

    2)Do u read the lines carefully? i said the largest differences are investment are a calculated gambling. why i said gambling? becoz as an organization, Proton operating in an unpredictable environment..who knows rite after the price of fuel rocketing sky high, suddenly drops below the ground & even a Petronas-worker a fellow of mine admit that they might dun get a bonus becoz low price of oil. its the term unpredictable, unstable, & constanly changing environment that makes the investment very similar to gambling for god sake. but a calculated one la deyy, if u juz wanna gamble with people money, dun need the BOD & management la to make decision..my auntie also can…hehe

    3)i believe my answer to ur 1st respond is sufficient…

    thanks for sharing!!

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  • krypto (Member) on Feb 11, 2009 at 4:20 pm

    VSS? hopefully the management makes a careful decision…maybe some of the dealers deserve it, but i believe not all…& compensation for contract termination also should based not only on sales target, but service satisfaction feedback, past performance etc etc…if not, it will only waste the taxpayer money..

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  • Proton Sagwa (Member) on Feb 11, 2009 at 4:26 pm

    Disturbingly, the figures talked about still show no sign of stabilizing. First it was 150k (cash) each, then 300k (cash) now 1 million (mystery), who’s to say when it will end. Really disgusting, especially when thousands of hardworking small businesses are going under this year with no compensation and outstanding debts to boot.

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  • not_ah_beng (Member) on Feb 11, 2009 at 4:30 pm

    @krypto

    “1)i didn’t say Proton should or shouldn’t pay RM1m to the dealers that are gonna be terminated…but do u suggest there are no legal agreements between Edar + EON & dealers? what makes u think dealership can be terminated freely without condition/compensation? its not the same if the contract expired, if that so, Edar + EON can decide whether to continue the dealership contract or not. For example, read today The Star on Scolari’s sacking. ”
    _________________________________________

    Of course there must be some compensation but RM1mil compensation is sounds like paying off the cronies and lopsided agreements like toll contract.

    These is proton dealers not merc benzes. I hardly belief they need RM1mil to cover their lost – nor is there any sane management who sign contract for giving RM1mil compensation for these type of businesses.

    “Proton operating in an unpredictable environment..who knows rite after the price of fuel rocketing sky high, suddenly drops below the ground & even a Petronas-worker a fellow of mine admit that they might dun get a bonus becoz low price of oil. its the term unpredictable, unstable, & constanly changing environment that makes the investment very similar to gambling for god sake. but a calculated one la deyy, if u juz wanna gamble with people money, dun need the BOD & management la to make decision..my auntie also can…hehe”
    ______________________________________

    Mostly I agree with this but issues like this and previous poor management, no accountability (was mahaleel ever charged even after he nearly bankrupted proton?), terrible past track record combo with almost zero transparency to taxpayer (even after using OUR money to bailed out Proton before do we have visibility on its accounts?) make me have no belief in Proton.

    Especially in this sort of economic crisis where G has more important thing to do with its money than pay for the mistakes of others….

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  • not_ah_beng (Member) on Feb 11, 2009 at 4:34 pm

    Btw I do belief my auntie who only received up to form5 education also can make a better decision than previous Potong management.

    She have a succesful stationery shop that can kept making profits despite competitions. Meanwhile, even without any competitions Proton keep going down, down, down…………..

    Why? Cos ordinary people like her, you and me, knows that, if mismanage and bankrupt our business, then need to go hungry lo. Others like Mahaleel of Proton and Munir Majid – even lost hundreds of millions of other peoples money, so what? No punishment what, not their money also.

    No accountability, thats the problem.

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  • BlackJKX (Member) on Feb 11, 2009 at 4:43 pm

    Yes,all is adik-beradik and sedara-mara punya dealer.
    VSS to dealer.Stupid.All need help.cant survive.When got money,go to karaoke.

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  • CFA28 (Member) on Feb 11, 2009 at 4:52 pm

    You think Proton will willing give RM1 mil or even RM300K to a dealer to close shop. Would Toyota or even Honda give their dealers $$ just to close shop, never in the real world of biz.

    But in Malaysia, we don’t live in the real world. We will be the only country not to fall into recession. And, take my word for it, Proton has been instructed to give $$$ to selected dealers to close shop. These dealers are all connected to the ruling elite. Why else would Proton offer them $$$. Normally, Dealers who cannot sell cars will have their contract terminated.

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  • mukhri88 (Member) on Feb 11, 2009 at 4:54 pm

    Wow, today I learned a lot about small, medium and big business. A bit of international business too. And accounting plus company law, business law, human resources management, sales and marketing, strategic planning, and investment analysis.

    Thanks for the tutorial, ladies. Did I miss any other subject? Oh yes, blind bashing form our wild child ‘one liner’ gogobama. Who’s this adil2008 dude anyway… monitor BMW, ahaks-ha..

    Paul, post more automotive business issues.

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  • krypto (Member) on Feb 11, 2009 at 5:05 pm

    i believed u guys really earned my respect..”salute”..i’m glad we are having a healthy discussion..n i also believed that we should be in the management committee..hehehe…
    well, i agree that in malaysia, we’re not living in the real world…crooks got away easily, & success don’t received credit..it is possible that there’s conspiracy behind all this, playing the country’s business game with one line of command..sound familiar?? hehe..we can hope for a better management by Proton & G and also shout out our voices…besides, it is our hard-earned money rite??

    p/s: do i sounded paranoid?

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 5:18 pm

    Terminating a dealer is a painful choice, but a manufacturer must consider the following, among other things:

    – The dealer’s sales in relation to sales in the market and sales targets
    – The dealer’s investment and obligations
    – Any injury to the public welfare
    – Adequacy of the dealer’s facilities, equipment, parts and personnel
    – Honouring of warranties by the dealer
    – Compliance with the dealership agreement, network standards, etc.
    – Manufacturer’s desire for greater market penetration
    – Any harm or damages to the manufacturer

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  • mukhri88 (Member) on Feb 11, 2009 at 5:25 pm

    maibatsu, all things considered, the question remains.. Does RM1m VSS solve the issue of bailing out the dealers. Analyze that.

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  • maibatsu_thunder (Member) on Feb 11, 2009 at 5:27 pm

    Does Ramly Burger give VSS to failed burger stalls? No way!

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  • I my (Member) on Feb 11, 2009 at 5:48 pm

    if now I got 2 outlet… than later also buta2 got RM2M!!! lagi best then go to buy big sweep!!!

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  • mukhri88 (Member) on Feb 11, 2009 at 5:52 pm

    what do you reckon Proton’s justification by considering this line of action. Surely they will have to answer to public queries such as us. After all, it is a matter of public/national interest… RM100m is no small amount, imagine the number of Murcielagos you can buy with that kind of money.

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  • ignas (Member) on Feb 11, 2009 at 5:53 pm

    lots of sdn. bhd. going to bankrupt soon due to this recession while those dealers get to get extra money from….ppl’s money!? why all these leechers keep on sucking our country’s depleting money and there is nothing we can do about it. everytime when heard news from proton, its always associating with the name of ‘cronism’.

    we’re heading to thailand’s direction in few more generations’ time. corruptions, overthrown government and civil wars.

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  • mystvearn (Member) on Feb 11, 2009 at 8:17 pm

    Peoton is tax payer’s money. Next time make new dealership, put in black and white say “proton has the right to terminate any underperforming dealership without notice”
    Wasting this much money is stupid. Even proton cannot explain what is happening here.

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  • csv (Member) on Feb 11, 2009 at 9:38 pm

    aiya, classic mismanagement from the era back then la what else.

    carries over to now. i agree they should cut down on the dealers but i dont think using taxpayer’s money to repay them is worth it. no way in hell my money is going to someone else.

    if we really have to kill proton, which i really hope for, it will be a tough one because for one, more than 80 percent of the country has proton. effectively killing them will neutralise any resale value of the car.

    it has to be done over the long term. like rover.

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  • catdeco (Member) on Feb 11, 2009 at 10:07 pm

    Nvm lah,ask proton to make a bicycle with 1.6 Campro engine,its better,save cost and easy to park.After this go to sunway pyramid oso sure easy one to get parking.

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  • NutzeyWagen (Member) on Feb 11, 2009 at 11:24 pm

    If I remember correctly, ‘unitedtas’ did mention something about Proton streamlining its’ dealerships this year in a posting some time back in 2008, but can’t remember exactly when.

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  • naz@proton (Member) on Feb 11, 2009 at 11:40 pm

    Why make noise all auto player r suffering losess n ask their govt to bail, named chrysler,ford,gm + psa citreon+korean+ toyota +honda loss no money to compete F1, mitsui sinking n nissan closed shop. I dont think their govt will closed eye n let them die. By hok or by crok govt will step in n bail out. Same like every father usually do to their child. Lu pikir la sendiri, mcm pandai but no brain….

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  • adil2008 (Member) on Feb 12, 2009 at 1:42 am

    hahaha…i not scolding anyone here……
    RM100 million is a huge amount for our rakyat Malaysia. spend probarlyLAH.
    Remember, all rakyat except for proton dealer is not involve in the proton business. dont take our money to compensate.

    mesti adil sebelum bertindak.

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  • maibatsu_thunder (Member) on Feb 12, 2009 at 8:07 am

    Naz the govts give bailouts to manufacturers in order to CONTINUE business and NOT DIE, but a manufacturer giving ‘VSS’ to dealers who are terminated/tutup-kedai (due to non-compliance and/or not performing) is unheard of. It’s not the same thing is it?

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  • LogicallyMad (Member) on Feb 12, 2009 at 8:37 am

    Hmm… from the article above and from what i know… the vss is not about terminating proton dealers that not performing or not meeting sales target…
    those type of dealers usually their contact can be terminated without compensation due to breach of contract…

    this vss is more likely because of Proton want to reduce the number of its dealers to an amount where they can control and monitor them….

    hence some dealers needed to be terminated… and these dealers are not the high performing ones… they still meet the target sales as stated in contract and hence not breaching it.. thus to terminate their dealership proton has to compensate them… if terminated without compensation it could results in court case and proton end having to pay more to the dealers…

    further more, i think not all dealers will get 1mill compensation… it will depends on their investment and contact terms… =)

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  • biggie (Member) on Feb 12, 2009 at 9:03 am

    Paul and the rest of the people
    The VSS or termination of dealership compensation do exist in our code of law and as the link below (not exhaustive) shows it also exist in many other countries. So if Proton need to terminates its dealership (according to performance specification stated in the contract) then Proton is liable to pay compensation accordingly.

    Malaysia
    http://home.swipnet.se/~w-10652/Malaysia_business_FAQ_1.html

    Rest of the world:
    http://law.onecle.com/michigan/445-trade-and-commerce/mcl-445-1571.html
    http://www.mondaq.com/article.asp?articleid=62084

    Sample dealership agreement:
    http://www.vontronix.com/download.asp?file=/FileLib/ADI-VontronixDealerAgreement122005.pdf

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  • muryadi (Member) on Feb 12, 2009 at 9:31 am

    LogicallyMad said,

    February 12, 2009 @ 8:37 am

    Hmm… from the article above and from what i know… the vss is not about terminating proton dealers that not performing or not meeting sales target…
    those type of dealers usually their contact can be terminated without compensation due to breach of contract…

    this vss is more likely because of Proton want to reduce the number of its dealers to an amount where they can control and monitor them….

    hence some dealers needed to be terminated… and these dealers are not the high performing ones… they still meet the target sales as stated in contract and hence not breaching it.. thus to terminate their dealership proton has to compensate them… if terminated without compensation it could results in court case and proton end having to pay more to the dealers…

    further more, i think not all dealers will get 1mill compensation… it will depends on their investment and contact terms… =)

    ————————————————————–
    I think above is more valid reason and logical…

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  • maibatsu_thunder (Member) on Feb 12, 2009 at 10:18 am

    We’re just guessing here because we don’t know what’s in the dealer agreement. But it would be pretty bad for a manufacturer to sign a dealer agreement where you have to compensate TERMINATED dealers with a VSS, which furthermore can be NEGOTIATED (from 150k to 1mill??)!

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  • Wisdom (Member) on Feb 12, 2009 at 11:45 am

    Just ask your self. Do you wants your company terminate you without any compensation.

    And everybody like to quote ‘my hard-earned money’. Now, how much or how many % of your money that actually loss?

    I know some will continue with ‘ i pay tolls, i pay for driving license, i pay road tax, i see movies also tax, eat KFC also tax, have to pay for parking etc….
    Now compare that to comfort of living here in Malaysia (compared to some other places which could be worst, or if other places really wonderful, you could need to spend much more). Hell i’m not being patriotic but i’m grateful and value my life here compared to my time abroad. And nor that i support Proton (non under my porch but eying on one as a token)

    But if its really your attitude… continue your grumble please..

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  • mukhri88 (Member) on Feb 12, 2009 at 2:08 pm

    IF BMW Germany decides that Auto Bavaria is no longer needed and BMW Malaysia can operate here by itself due to streamlining process etc. Will they compensate Auto Bavaria even if Auto Bavaria performs as good as BMW Malaysia?

    If yes, then that justifies what Proton is going to do imho. Question is, how much is too much. If no, well, that’s up to a public tribunal to decide.

    Wisdom, if they use my tax money to improve education, help the poor and improve infrastructure, I will NOT grumble. That’s the whole point of Paul bringing this up in this forum in the first place.

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  • Sex is wonderful, but it's like champagne.If you're forced to have four glasses at every meal you start to fantasize about water. (Member) on Feb 12, 2009 at 2:36 pm

    bloody disgrace

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  • LogicallyMad (Member) on Feb 12, 2009 at 3:13 pm

    hmmm how much tax you paid a year???? a few thousands?

    might not even make it to the 100 mill needed by proton…. cuz those infrastucture build by the govt such as the road, schools, lrt etc…. also used tax payer money… ur tax money.. even if collected for a decade might not even enough to build a small fraction of those insfrastructure…..

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  • krypto (Member) on Feb 12, 2009 at 5:01 pm

    to wisdom & Logically Mad,

    we are really regret bcoz we grumble and complain eventhou we only pay very small amount for taxes unlike u…but bear in mind, it is okay if the compensation is truthful & in good ways and clear …what we been trying to discuss here is about whether the management make a wise decision, or are there mismanagement in channeling our very small sum of taxpayer money…who knows if they get away this time with RM100m, they might easily spend more on useless things & our fund will finish just like that…have u ever heard about a RM3m project paid for RM6m (for example)…where are the RM3m balance? they call facilitation payment in Europe…in malaysia, bribery & corruption…

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  • CFA28 (Member) on Feb 12, 2009 at 5:51 pm

    Please remember that if all of us, small ppl stop paying their taxes, even if it only amounts to a few hundred or a few thousand per person, the Gamen is in serious trouble.

    Notwithstanding that large corporates like Genting and Petronas contribute billions in taxes to the Gamen, its the small ppl like us who also contribute to the coffers of the Gamen. You should not belittle the small tax payer.

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  • Automotive_Critics on Feb 12, 2009 at 11:06 pm

    maibatsu_thunder said,
    February 12, 2009 @ 10:18 am

    We’re just guessing here because we don’t know what’s in the dealer agreement. But it would be pretty bad for a manufacturer to sign a dealer agreement where you have to compensate TERMINATED dealers with a VSS, which furthermore can be NEGOTIATED (from 150k to 1mill??)!
    =========================================
    Enough said maibatsu..i know you’re from Honda. Just say you want P1 collapse and your Honda can sell well. You’re only the idiot Japanese blind rear bottom observer. You will get yellow. Come on, be consious, wipe your face with water and see the mirror. If you’re malaysian, try to be adapted with the reality. Don’t always dream like those japs. I dare to tell what is inside the picture of Honda. Enough said.

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  • 1st round VSS pay RM135K to RM150K. 2nd round VSS pay RM300K (proposed). What happend to the inbetween’s dealer which was termination by Proton Edar somewhere in Jun 2008??? REASON – REGISTER CAR NOT ENOUGH AS TARGET (150 UNITS FOR 4 MONTHS) We ex Proton Edar Dealer. We tryied very hard to maintain the dealership but the allocation of the car is not enough, demand is higher. While terminated, we have 80 customer which loan approved & downpayment paid but car cannot deliver by Proton Edar. While at the bad time, we are suffer alone, cover the overhead cost becouse Proton Edar did not given any support. When Proton Edar has recovered somewhere middle of 2007, they’re eager to close down or trim the dealer. Like this ke they doing business… maybe since PERODUA team coming to the Proton Edar management. Anak sendiri dibuang (Proton Edar Dealer) & Anak Tiri (EON Branch & Dealer) ditimang-timangkan. No EON dealer was terminated. Please Help Dr. M……

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  • maibatsu_thunder (Member) on Feb 13, 2009 at 1:06 am

    Automotive_Critic – on the contrary I’m not from Honda. I don’t want to see Proton collapse and in fact I’ve got some ideas on how it can not only continue but prosper. Did you even read and understand what I have written so far? Proton is tied in to the direction of the Malaysian Automotive Industry. It is hard to separate.

    The rest of your childish insults I won’t respond to. People like you make this blog look bad. Don’t tell me – you’re either a Proton employee, dealer or vendor?

    Honda is already selling well thanks to the legions of fanboys who will buy anything with a Toyota or Honda badge. Not only that but the government is giving zero import duty on CKD ASEAN thanks to CEPT, but CKD Thailand parts are considered ASEAN parts, and ASEAN parts are defined as ‘local parts’, hence eligible for FULL excise duty exemption since NAP. Why don’t you cry about that? Oh you didn’t know? Honda profit margin is very healthy, and they don’t pay RM1 million to terminated dealers. At all.

    Why don’t you tell ‘inside the picture of Honda’. It should be quite entertaining. But try to post something above the intelligence level of an 8 year old please, because you’re shaming yourself.

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  • john mclane on Feb 16, 2009 at 3:13 am

    Some Malaysia business/industries has been running "on the name of the country" to benefit certain group/ethnic of people for over 20 years. They will stopped such cash-cow sure win format by listening to what we talked here? Best yet, when the car sales dropping, they come out the new scheme of earning through Petrol tax, whats next? The consequences, the country business or people will become uncompetitive globally. When the next economic crisis strike the country, and with Petrol company having limited fund to support, you will see where the G squeeze the money from…yes, thats you and me, and the cash rich EPF.

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