2016 Proton Saga development cost RM150m – break-even in three years with 5k per month volume

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The third-generation Proton Saga – officially launched this afternoon – boasts a new powertrain and fresh sheetmetal, but is based on the same platform as the Saga BLM from 2008. The 74 mm added length from the previous car is all in the overhangs – both cars share the same 2,465 mm wheelbase.

At the press conference after the launch ceremony, Proton CEO Datuk Ahmad Fuaad Mohd Kenali revealed that the development cost for the new Saga is RM150 million, which is relatively low for a new model. This is because there was no new platform development involved.

“The Saga has been developed on the existing Saga platform. We recognise that our volume is not that big, so we have to economise in terms of development cost,” Ahmad Fuuad told reporters.

Proton-Saga-Plus-2

“Based on the same platform but by improving the technology in terms of engine and transmission, we have good value from the development. Total cost incurred is only about RM150 million, which is a good number for a market our size,” he said, adding that the break-even level for the new Saga is three years if the company sells 5,000 units of the entry-level sedan per month. That’s also Proton’s sales target for the Saga.

The new Saga, positioned as an A-segment sedan to rival the Perodua Bezza, is powered by a 1.3 litre VVT engine with 94 hp and 120 Nm. A five-speed manual gearbox (Standard only) and CVT automatic (Standard, Executive and Premium) are the transmission choices. Available in three trim levels, the new model is priced from RM36,800 to RM45,800 OTR including insurance.

Full specs and galleries in our launch report. Also, check out our walk-around video and first impressions review.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • Das Auto on Sep 28, 2016 at 7:38 pm

    Good luck. Somehow Saga attracted me more than Pesona. Maybe it is a good no thrill no frill car that sufficiently transports from point A to point B. One don’t hate nor love it, nor does one gives it a glance or despises you for driving it.

    Like or Dislike: Thumb up 35 Thumb down 6
    • Sama L00 on Sep 28, 2016 at 8:01 pm

      This quality and design need so much money? Proton designer design it at Mauritius beach?

      Like or Dislike: Thumb up 19 Thumb down 79
      • Sam proton on Sep 28, 2016 at 10:38 pm

        Time to change your son saga to this new model.

        Like or Dislike: Thumb up 6 Thumb down 1
      • Sack designer on Sep 29, 2016 at 9:12 am

        Sack the designer!

        Like or Dislike: Thumb up 4 Thumb down 7
      • Kuntak on Sep 29, 2016 at 11:03 am

        You knew the car industry better? You really knew how much it cost to develop a car? So you should start your own company. Sure untung manyak punya meh.You only need pirated CAD/CAM software and low paid bangla to design the car.

        Like or Dislike: Thumb up 3 Thumb down 0
    • Pretty much describes what VW is: nondescript, undiscerning, but solid reliability.

      Like or Dislike: Thumb up 5 Thumb down 0
    • sam12345 on Sep 29, 2016 at 12:08 pm

      A hack job using proton iswara nuts and bolts cost rm150m, honestly thats too much..

      Like or Dislike: Thumb up 0 Thumb down 5
  • Making less than rm1000 per car according to this guy. Bull!

    Like or Dislike: Thumb up 18 Thumb down 9
    • Albert on Sep 28, 2016 at 8:16 pm

      In business,one targets a certain level of profits.
      For Proton…they target BREAKEVEN POINT for first few years.,at a minimum of 5000 units/month.
      By right,P1 should target 7000 units/month.
      When you set 5000 units as target,you may hit 4000 or 3500 units.
      At the way they set targets to breakeven,P1 WILL NEVER MAKE ANY PROFITS COS they have to pay Honda japan and Suzuki Japan development/copyright costs for the Hondana and Ertiqa,easily exceeding half a Billion Rm.
      If your accountant is not from outer space,he will tell u Proton will NEVER be able to repay the Rm 1.5 Billion loan,and will REQUIRE ANOTHER FRESH INJECTION of bailout cash come 2017.
      Coming budget,this bailout funding will be reflected as R AND D for PRESTASI KERETA NEGARA.

      Like or Dislike: Thumb up 22 Thumb down 23
      • Maybe they are planning for 3500-4000 a month. But set 5000 a month. Badum tss!

        Like or Dislike: Thumb up 8 Thumb down 3
      • Dedak in the house on Sep 29, 2016 at 12:38 am

        The target u r referring to saga model right? Y need to target so high just to pay royalty to honda n suzuki.. i believe the royalty base on sold perdana and ertiga.. got nothing to do with saga n persona..

        Like or Dislike: Thumb up 3 Thumb down 0
    • AutoFrenz (the original) on Sep 28, 2016 at 8:20 pm

      We should all support Proton now since they are trying. I propose to the Government to cut every single working adult salary in Malaysia by 1% and give this 1% to save our national pride Proton.

      I am glad to do this as my contribution to the country!

      Like or Dislike: Thumb up 3 Thumb down 11
    • Mimau on Sep 28, 2016 at 8:28 pm

      you mean, the previous guy.

      Like or Dislike: Thumb up 1 Thumb down 0
  • So much money spent yet it’s using the same 8 year old platform? I stopped by the Mutiara D’sara showroom otw home to check it out and I notice some parts taken from the 2nd gen Saga from side mirrors to the dials.

    But the proof of the pudding is in the eating, so I’ll probably go and have a test drive this weekend.

    Like or Dislike: Thumb up 12 Thumb down 33
    • hakim on Sep 28, 2016 at 8:24 pm

      side mirror is consider as accesories LOL…sooo LOL….sooo LAME

      Like or Dislike: Thumb up 1 Thumb down 0
    • kzm (Member) on Sep 29, 2016 at 12:00 am

      You think current Toyota Vios using new platform? Toyota B-platform under pinning Vios already been use since 2005.. This platform has been use since last gen Vios. Just Google Toyota B platform. FYI

      Like or Dislike: Thumb up 16 Thumb down 1
  • Ini CEO. Reporter Astro tanya dalam BM, dia jawab pakai BI. Kalau BI bagus tak apa, ni cakap sekat sekat.

    Like or Dislike: Thumb up 11 Thumb down 47
    • Dedak in the house on Sep 28, 2016 at 8:00 pm

      Thats all? Come on la brader.. u r better than this.. bash more la.. bash other thing..

      Like or Dislike: Thumb up 44 Thumb down 5
    • Sama L00 on Sep 28, 2016 at 8:03 pm

      Zahid Hamidi style

      Like or Dislike: Thumb up 23 Thumb down 4
    • Sally on Sep 28, 2016 at 8:13 pm

      Atleast he try.. jgn jdi typical melayu sangat la nak kondem orang sana sini, kalau silap tolong betol kan, bukan kondem.

      Like or Dislike: Thumb up 40 Thumb down 1
      • Apa try try? Try your inferior on people’s hard earned money.

        Like or Dislike: Thumb up 2 Thumb down 6
    • Yong Tau Fu on Sep 29, 2016 at 10:03 pm

      You disappointed me.. I expect more from you. This bash are still not in ur usual level.. Please mantain ur quality

      Like or Dislike: Thumb up 0 Thumb down 0
  • Encik Kunta on Sep 28, 2016 at 7:59 pm

    According to the old CEO, Proton only makes RM500 per Saga sold. Can Proton really make enough money from 5000 cars sold per month to pay back this RM150M research cost as well as sustain 12,000 workers?

    Proton has near ZERO sales from the other cars in their range. Their only hope is the Saga. Assuming by some miracle they sell 5000 cars per month, if each car profit is RM500, that is only RM2.5 million per month profit.

    that alone hardly can pay the Board of Directors per month. Each director earns 6 figure salary per month.

    So, how to pay the 12,000 workers?

    Like or Dislike: Thumb up 24 Thumb down 14
    • Zamin on Sep 28, 2016 at 8:46 pm

      In their dream they could sell that many cars how they can sell over 15000 plus cars per month persona and saga abd iriz in local market where p2 sells al its 20000 per month easily? Dream on drb u r a dead corpse

      Like or Dislike: Thumb up 1 Thumb down 0
    • Ayoyo on Sep 28, 2016 at 9:02 pm

      Ayoyo boss. Today they announced Persona oledi got 10000 booking. How come you said no income except Saga only lor. Kena baca news. Hati mau buka.

      Like or Dislike: Thumb up 12 Thumb down 1
    • Mohd Nazri Md Akim on Sep 28, 2016 at 9:12 pm

      For real..500 only? Tht is kindda stupid aite…look i like proton…but it cant be 500….
      Say it is 35k…
      Say that Govt take 5k for tax
      And 5k for dealer profit
      So they have balance of 25k…
      Body 5k
      Engine 3k (they make themselves)
      Gearbox 2k
      Wiring 2k
      Paint 1k
      Other parts 8k
      Tyre & Rims 1.5k
      That is about 22.5k
      They should make aroud 2.5k profit not inclusive labor….

      Dont know la, just wild guess…sorry kalau salah

      Like or Dislike: Thumb up 6 Thumb down 0
      • ex-VGM staff on Sep 29, 2016 at 9:50 am

        a good guess. no, the cost of producing a car like this Saga is seomwhere in between 10-15k. (15 years ago a CBU Kia Spectra was brought in at below 10k but pushed to sell at 80K – reason Naza group went rich). dont forget government taxed the car minimum 70% in excise duties and another 6% GST. so it is about cost of the car (CIF or cost, insurance, freight) + taxes + profit margin = retail price. :)

        Like or Dislike: Thumb up 3 Thumb down 0
    • Rationale on Sep 28, 2016 at 9:34 pm

      It is assumed that the profit includes settling their obligations, obviously mate, it’s profit, please correct your judgement. Rm1000x 5000= Rm 5m multiply by 36 months = rm180m. If they hit their target they’ll breakeven on the 30th ending month, leaving 6 months of breathing air. Btw, 500 was the old car if not mistaken, correct me if I’m wrong.

      Like or Dislike: Thumb up 2 Thumb down 0
    • Sell expensive, u bash.
      Sell affordable, u pun bash.

      Walauweh!

      Like or Dislike: Thumb up 5 Thumb down 4
    • belangR on Sep 28, 2016 at 10:49 pm

      already include salary….that why it call profit per car…

      Like or Dislike: Thumb up 3 Thumb down 0
    • Dedak in the house on Sep 29, 2016 at 12:35 am

      Wow.. ur math very superb.. minister can say anything, even can make dead people alive in the next day.. but the ceo is an accountant.. numbers are his life brader.. u gave simple math and suddenly check mate for p1??? U kiddin me aint ya?

      Like or Dislike: Thumb up 1 Thumb down 2
    • RojakSauce on Sep 29, 2016 at 11:29 am

      Easy, just shut down Proton la, and demolish Excise Duty for other Brand car !!

      Like or Dislike: Thumb up 0 Thumb down 1
      • Yong Tau Fu on Sep 29, 2016 at 10:07 pm

        If proton shut down the tax still exist maa.. Where do you think government get their money.. Aiyoo..

        Like or Dislike: Thumb up 0 Thumb down 0
  • Daffy on Sep 28, 2016 at 8:25 pm

    Maka, bermulalah dan berkeluaranlah segala pakar-pakar dari semua segi bidang dalam korum ini..

    Like or Dislike: Thumb up 7 Thumb down 0
  • Mohd Nazri Md Akim on Sep 28, 2016 at 9:00 pm

    Sorry i dont get the math…3 yrs at 5k unit a month, what is their net margin per car?? It cant be like eight hundred ringgit only per car…is that so??

    Like or Dislike: Thumb up 1 Thumb down 0
  • If selling 10k, 1.5 years settle

    Like or Dislike: Thumb up 5 Thumb down 2
    • Camrysai on Sep 28, 2016 at 9:26 pm

      10k in volume?

      Like or Dislike: Thumb up 0 Thumb down 0
    • Please don’t make jokes. 5k a month is a huge target. The first few months might go up to 6-7k/month but it will drop drastically in the following months. It should be at a steady 3-4k/month. So they’ll need much more time to breakeven. The car is good and looks nice but let’s face it, the pie is divided into too many pieces. Even Honda and Toyota can make more sales than Proton in its own turf. In fact the previous Saga was going at about 4-6k/month. But now…Perodua has a competitor. It might be ugly and useless but it will still pull in some percentage of Proton’s sales.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Daisuk on Sep 28, 2016 at 9:58 pm

    Since Persona launch, how many you see on the road?
    Go to your showroom tomorrow and if you are lucky, you see the new Saga there. Proton still remained to be Proton. Lancar all good. Follow up, not good. That is Proton.

    Like or Dislike: Thumb up 3 Thumb down 3
    • Dedak in the house on Sep 29, 2016 at 2:45 pm

      Brader, the new civic after 1 2 month i saw one speeding to 2nd link bridge.. and next day i saw another one (same owner la of course) same as bezza just this week then i saw few on plus highway.. what? The owners kept the car in their garage ka all these days?

      Like or Dislike: Thumb up 0 Thumb down 0
  • Facebook on Sep 28, 2016 at 10:18 pm

    this kind of car with so many shared parts yet require to spend 150million to develop? the worse thing is u r expecting to sell 5000 units constantly every month for 3 yrs to break even the R&D cost spend… this is crazy…

    Like or Dislike: Thumb up 2 Thumb down 4
  • Popzee on Sep 28, 2016 at 11:20 pm

    While rm150m might seem alot for an average Malaysian, its peanuts for automotive companies. So stop comparing the development and research cost with your meagre salary

    Like or Dislike: Thumb up 16 Thumb down 6
    • Rm150 on Sep 29, 2016 at 2:09 am

      Can’t help it, a lot of uneducated that don’t have experience with large sums of money.

      They think R&D over 2 years cost RM 1.50

      Like or Dislike: Thumb up 6 Thumb down 2
      • A lot of people think 1.5bil R&D cost by uneducated Proton people produces the same result as other makers.

        Like or Dislike: Thumb up 1 Thumb down 3
  • donno on Sep 28, 2016 at 11:38 pm

    How to half your break even point? Easy. Export 5k of saga a month too.10 countries @ 500cars per month. Can be done.

    Like or Dislike: Thumb up 5 Thumb down 0
  • donno on Sep 28, 2016 at 11:40 pm

    I really2 hope to see a wagon and pickup (arena replacement) version of the new saga soon.

    Like or Dislike: Thumb up 2 Thumb down 1
  • passion on Sep 29, 2016 at 9:00 am

    i wish i could say WOW. but there is something not right about the design and proportions. i wonder what it is? anyway i believe its a good car though. well done P1.

    Like or Dislike: Thumb up 1 Thumb down 1
  • sabahan on Sep 29, 2016 at 12:46 pm

    gosh…. 150 mil just to develop a Saga.

    what is a brand new without copy Perdana? 1.5 bil?

    Like or Dislike: Thumb up 0 Thumb down 2
 

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