National carmaker Proton announced its financial results for the first quarter of the company’s 2010/11 financial year. It was positive figures across the board, with a headline of RM105 million profit before tax in Q1. This is significantly more than the RM13 million profit made in the previous quarter (Q4 09/10). In the same period of the previous financial year, Proton posted RM64 million profit before tax.
Riding on the 19% growth in Malaysia’s Total Industry Volume (TIV) for the first half of 2010, Proton sold 39,994 vehicles in Q1, which is 8% more than the corresponding period in 2009. Similarly, revenue rose to RM2.29 billion from RM1.85 billion.
Some of you might have been surprised at Proton’s position in our recent Thai market report post (Exora is the best selling MPV in Thailand), and the company is happy to announce that total exports have increased by 88% (8,303 units) compared to Q1 09/10. This figure takes into account the Gen2 and Persona CKD kits exported to China, which amounts to 60-65% of total exports. In the longer term, the company plans to introduce the Proton brand in China, making the world’s largest auto market its left-hand drive hub.
Proton, which has a presence in 29 countries, is working hard to boost exports as “the domestic market has reached saturation point and exports are needed to increase economies of scale,” according to Proton Chairman Dato’ Sri Mohd Nadzmi Mohd Salleh.
The company is also seeking to establish more CKD operations in other countries to replace the current CBU (except China) practice, as localisation to meet diverse needs is essential. The markets Proton is eyeing are ASEAN, China, Iran and India. The short term goal is to reach 40,000 export units this financial year.
Besides higher car sales, Proton attributed the improved financial showing to the ongoing efforts to rationalise its dealer and support network. Offering value added products/services, consolidation of dealers, increased efficiency and the promotion of the use of genuine parts all led to a 40% growth in revenue from service and spare parts in Q1.
At the media briefing, management revealed that the company is deep in a restructuring process that will see it being divided into four strategic business units (SBU). While not disclosing what the SBUs are (there could be a manufacturing arm and a dealer arm, for instance), it was explained that by doing this, it would be easier to collaborate with other companies.
For example, if company V wants to work with Proton on vehicle assembly, it would be possible for the manufacturing deal to happen without company V buying equity into Proton. V may be eyeing something Proton has, but may not want to manage another brand.
At the event, Proton MD Dato’ Syed Zainal also showed off some very interesting future products and plans. Stay tuned for more!