According to second minister of international trade and industry Datuk Seri Ong Ka Chuan, Proton vendors need to cut prices by as much as 30%. The minister stated Proton CEO Li Chunrong has issued the ultimatum to parts suppliers, where failing to do so will result in the national camaker sourcing its parts elsewhere.
In a report by The Edge citing Nanyang Siang Pau, Ong pointed out Proton is buying automotive parts at a 30% premium from market price, and these costs will ultimately be borne by consumers. “Asking suppliers to cut prices could reduce Proton’s operating cost, which will enable consumer to enjoy affordable prices,” he said.
He added that once the necessary reforms are done, Proton would be able to properly execute its turnaround and offer affordable models of good quality. Ong also remained hopeful Proton would have more presence in international markets.
“Proton’s production has fallen from its peak of 200,000 unit to 70,000 units last year; the company lacks export strategy and only does domestic sales, so it can’t explore overseas markets,” Ong commented.
The minister also revealed Proton will close its Shah Alam plant in phases, and will completely move to Tanjung Malim by 2019. Production goals have been set at 200,000 units vehicles within its first five years and 400,000 units in 10 years, of which half of it will be catered for the export market.
“Thailand is producing 1.2 million vehicles every year; once Proton possessed advanced automotive technology, coupled with affordable prices, I believe having a 500,000-unit production is not an issue in future,” he said.
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great job…why didn’t you do this all those years ago??
Syukur Geely Chinas tuan yg berani.
Proton had had so many CEOs. None of them could figure this out?
We public knew about this long ago. We voiced it in forums about 20 years ago. We knew, Proton’s biggest problem was its vendors and suppliers.
So why all the past CEOs never identified this issue? It takes a China CEO to show us the light?
the best part is, all the past CEOs of Proton have got bigger CEO jobs in GLCs after their posting in Proton. As a reward.
Pretty shocking that a foreign CEO have to tell us about this issue.
So shameful to the past BOD of Proton and also the current BOD of Proton. All got 7 figure salaries per annum. Some even got 7 figure salaries per month.
Thank you ex CEOs
Not only vendors and suppliers. Proton needs to be lean to make money. Soon Li Chunrong will see to this
Proton has 10,000 workers. They produce 70,000 per annum
Mitsubishi in Thailand has only 6000 workers. They produce 320,000 per annum
70,000 cars (10,000 workers) vs 320,000 cars (6000 workers)
Over to you Li Chunrong!
Ahmad Fuad Kenali is now CEO of Malakoff. Bigger pay and reward for good job done at Proton!
Look at who were the prime minister that time. same as jaws 2 movie huh… why sprm didn’t go n check there.
Mai.Miti, under EEV when 30% car price reduction as planned 4yrs ago to be implement… Now we seeing many car price UP instead…
They did but a exchairman that was a certain leader said “dun kacau or else…. well, look what happened to AAB.”
Tipu la john #fakenews
There is some truth to this.
Now that Mr Li & Mr Ong have confirmed the obvious of overpriced by vendors, it will be interesting to see how many vendors can step up to the challenge of better quality & cheaper products.
Does it translate to cheaper price of P1 vehicles in the future ??!
Dah tau parts are so overpriced, what did the previous CEOs do about it? Just wait for Tongsan CEO to come in and do the obvious?
China CEO get things done so fast. See now give ultimatum.
Local CEO….just incapable and goyang kaki.
Just goes to show how goyang kaki our local CEOs are and overpaid.
Zero quality
Wow DRB proton. just Woww
Correct! Fully agree! The worst r those Jepunis near-retirement CEOs. Alwiz golf here and there, deswai u see the abysmal sales of toyota. This unlike locally staffed and managed HM DRB that gets record sales year by year.
Local xberani. Vendor syarikat adik abang
Just change the vendors la.. they have earned too much all these years
to be honest it’s understandable why local vendors are selling at 30% higher than market rate.
when Ong said market rate, are we comparing with Malaysia market rate or overseas?
Obviously with all the import tax, ringgit depreciation, fuel hikes, GSTs and import permits, all these adds up cost to local vendors.
it would be unfair if Ong comparing local vendor price with China vendor price.
China can sell you a wrench to Malaysia for rm2 including postage. Malaysians can’t even send a small packet within the same city for rm2.
This is correct statement, when we bought from Lazada and the foreign sellers can sell you a smarphone casing for 20.00 ringgit including delivery from China, imagine we courier within malaysia pun already 7.00.
No ones can follow the Chinese in cost effective ways.
you compare courier cost and normal post slow shipping. try use EMS and see how much to ship from cina.
No, but it will translate into profits for the Company.
Reality really hurts. Accept your pain, It will hurt less.
It’s good that people who know business is running proton today.
China vendor cheaper yet kualiti like conti. my Ipong4 workin gud.
Your Excellency Li Chun Rong,
If a gomen minister must come out to remind Protong vendors to cut prices by 30 %,something is very wrong somewhere.
Just bring in your china vendors ,provided the quality is there.If still cannot improve,better close shop.Just concentrate on your Volvo.
And dont you dare ask for tax funded bailouts from the rakyat of malaysia.
Gv them vendors some love..
https://paultan.org/2005/07/21/proton-vendors-want-protection/
Sounds salty… But DRB still holds the 51%
Aiks, we need the newly appointed chinese ceo to break the premium news to us? Wouldn’t previous ceo and ceos knew about this already?
Vendor marked up 30& price becoz of GST.
Tambah 30% sebab gst? Serius? Hotel? Trivago
GST actually adds more cost than 6%. ringgit depreciation, import tax, distributor margin, fuel price hikes, higher tax rates, all these adds up the cost.
30% sounds reasonable. even at 30% mark up, vendor’s profit margin is still very low, maybe not even 10%.
Guaranteed profit for past 30 years…
So shy we need foreign CEO to help us. Like MAS. We need foreign CEO to guide the company.
Merdeka in 1957. Still don’t know how to run companies and even the country
Silicon valley companies pun banyak ceo non american. “The best paid worker is the best worker” – ahmadjr
Well luckily we have some superb heads at MY MNCs and GLCs as well as a steadfast captain of the nation. The country’s future has never been brighter, and we r now no longer fearful of integration with the world at large.
Why Proton is buying automotive parts at a 30% premium from market price?
1. Proton’s volume is so kecik meow, cannot cover development cost.
2. Incompetent workers with lousy negotiation skills. Why other brands can get better price but not Proton?
Btw, why is a minister speaking on behalf of Proton?
The answer from vendors will be. First we will reduce material quality to compensate for the lower price. Second. We will have to cut down our human resources by as much as 50%. Agree, NO? Unless proton. You improve and increase your total sales volumen with immediate effect to 200k units starting this year.
They should have moved to Tanjung Malim when it was first opened. Keeping Batu Tiga open was stupid.
You sure they really want to ask the vendors to cut price and not an excuse to source from China’s vendors?
Hardly a year into the (semi)takeover and the People’s party already showing sign on effective business making decisions. Seizing the Means of Production and using them for the greater good instead of for personal gain like those filthy capitalist.
“Proton’s production has fallen from its peak of 200,000 unit to 70,000 units last year; the company lacks export strategy and only does domestic sales, so it can’t explore overseas markets,”
Even a blind comrade can see the faults of Proton, dirty 20 year Jepunis stagnation will be cleanse with glorious Chinese mastery.
The last sentence, ouch!
Might as well look for other vendors……Current local vendors sucks anyway, with low quality products. Even the plastic wrapper bags look cheap. Probably these vendors comprise of the usual pakcik, saudara, abang ipar cronies and the gang….Usual suspects
stop giving contracts to crony companies and you will get cheaper price and better quality!
I guess when real businessman takes over, this is what happens. Unnecessary expenditure, above market rate purchases semua kasi cut. Now imagine the price of Saga currently around RM 36k, with 30% savings, that’s only RM 25.2k. With this kind of price, I think Perodua also tremble a bit… maybe just a bit… but it shows how it should have been priced.
I’d imagine with the 30% parts price reduction, the selling prices would more or less be the same but production costs would be quite a bit lower. The money saved is more towards keeping the factories running and upgrading facilities.
Selling the Saga at 25k would be great, but ultimately loss making which is not what Proton wants right now.
Actually if we cut the custom duties from 75% down to a lower say, 25% – it is possible to get sell the saga at 25k
Saga has ZERO customs duty. How do u impot a locally build car?
he probably meant excise duty
which parts of the car the most priciest ?…engine ?..gearbox ? or the wheels ?
…but he doesn’t complain about government enforcing the local excise tax of 75% to 90%….
https://en.wikipedia.org/wiki/Malaysian_motor_vehicle_import_duties#Motor_cars_(station_wagons,_sports_cars_and_racing_cars)
Itu perodua pun kena
…but he doesn’t complain about government enforcing the local excise tax of 75% to 90%….
Tak payah la ambil dari vendor tempatan dah. Biar mampus semua. Berapa juta orang kita berhutang lebih sebab dorang tapi dapat barang kaput. Kilang dorang pun indon bangla je yang ramai
i second u.. the parts quality plagues proton owner for years man..
How to sell 250k units when your after sales service is suck to the max, proton? Fixed that one too.
https://paultan.org/2018/01/25/more-proton-dealers-to-upgrade-to-3s-and-4s-centres/
https://paultan.org/2018/01/02/four-proton-dealers-to-upgrade-to-3s-and-4s-centres/
https://paultan.org/2017/12/22/dealers-investing-millions-of-ringgit-in-proton-outlets/
https://paultan.org/2017/12/18/proton-dealers-visit-geely-dealership-research-centre/
Sad to see all those savings from decades ago were feeding some elites up there.
ChangE. Dun cha think
Dulu brag banyak, cakap ada Petronas 2.0T engine untuk Perdana in end year 2017, dulu cakap nak replace all Punch CVT with Jatco CVT dgn ada engine GDI & TGDI in the new Saga & Persona, sekarang satu tahi tak jumpa pun. This Proton has no different than our government, all suka cakap besar shiok sendiri, dulu ingat save duit nak beli Proton kereta yg pakai engine turbo gdi dgn Jatco CVT sebab mereka promise nak improve, tapi sampai sekarang masih sama…
Emmm….. I think proton focus on quality issue before move forward. Better delay rather than face common problem.
what petronas 2.0T? that one sudah lelong already years ago. GDi you think is low cost engine kah? even mitsui also surrender to continue develop this kind of tech.
Which R&D costs low? U want revolution definitely have to invest. Want to copy car design also need to invest buy photocopy machines. Thats not cheap too.. like the other Malaysian car manufacturer…. oops.
If you look at expenses POV, yes it is expensive. Look at capitalizing the costs.
If you refuse to invest, I think Proton will only sell Proton Saga Orion, Magma & Megavalve until now
I would prefer Proton to go for Lotus’s direction. Use own chassis, buy engine and gearbox from others. Satria Neo with Mitsu MIVEC engine is amazing and fun. At least we know Mitsu engines are reliable and not too thirsty.
Datuk Sri Ong is so blurred & simply stated that an annual figure of 1.2 million unit of vehicle being produced in Thailand. The fact is in 2017, Thailand is producing 2..0 million unit!
See how far Malaysia automobile industry had lagged behind.
Shame on those cronies.. allowing 30% above market price is corruption
I guess the China management is not going going to reduce Proton car prices but to increase their profit to the max…talk about business minded…
The problem with the previous management is that the cost is higher than its revenue, that’s why gmen loan them your tax money to save them.. the china guy now is saving your tax money..
More like euro cars…
Or else i will import from China…one road one belt…LOL>..
Don import also can, im just afraid even ur house wont have replacement for electrical appliances after rosak
Talking nonsense….. in Cantonese saying, “who doesn’t know my mother is a lady”.
I want to ask the new CEO and Minister. In order to reduce 30% material price the vendor need volume. And further to that Geely buyout of Proton shares is to increase Proton sales to international market such as China. Have you CEO and minister work on this? So far I saw busy making Bayu and renovate showroom only.
Is this Chinese ceo talklng nonsense or what? Sure or not vendors makeup 30% more than average.? Just tell us whats the profit for a car you are selling. In automotive industry, vendor has to declare whatever cost involved, raw material etc in order to manufacture a part. Is an excuse to bye2 local vendors. Please bring in Chinese vendors so that proton can maximize d profit. Or just rebadge geli’s car with proton badge. With a good marketing, no one knows which factory its being produced whether in shah alam or china. Just wondering, proton persona 1.6 cvt versus perodua bezza 1.3,the price almost d same after both giving discounts, meaning perodua also buys 30% expensive parts?
Cheap things no good.
Last time drb said they only make rm500 profit per car. U know, i know why.
My first car was proton, my brother’s car was proton, my dad’s car was proton…. and after all these years you are telling me this, solute you Mr Minister
And so it begins…either shape up or ship out.
MACC please look into it, for the last past 20 years
they knew oledi.. but something smells fishy.. 1st gen waja quoted by proton to MITI was rm30k+ .. but MITI marked the price up to rm50k+. darn those top brasses
Had to let a foreigner tell you that your vendors have overcharged you by 30%! Well done, proton!
This is rather stupid demand from proton. How can we reduce the price as much as 30% when our margin is only 6%. This is only possible if u got the volume. Not once have u ever achieve ur prod target for 2017. So how is this even possible? To vendor, this is only a strategy for u guys to resource for china supplier. So all the government promises to protect the interest of local supplier is all just a big fat lie
Proton sales are expected to hit 500,000 units per year. So all the government promises to protect the interest of local supplier. Janji ditepati
Maybe not all of you guys margin just 6%. Let me tell you example of myself being a typical consumer only. I broke my door trim plastic clips. I bought replacement clips at Proton part center in Glenmarie. It cost me more than RM3.00 per clip. For real ? I think it wont cost more than RM 0.50 to make 1. So how many % margin we talking here.
The end is near for mesian ploton vendors. The margin is thin & now forced to cut summo. The cashflow is tight and is going to bled further. Got loan to service and overheads to pay. Hi time to change business. Sell your business to geely vendors. Don’t worry, geely will get cheaper parts. They can do it. Even to ploton & volbo they can do it.
good job
its about time the leeches wake up from sucking too much blood from p1 ^^
Will that mean that proton cars will be 30% cheaper? Why do we Malaysians have a fascination with this 30% figure? Everything oso must 30%