Proton has just released a statement addressing the concerns of the Malaysian Association of Malay Vehicle Importers and Traders (PEKEMA), which have surfaced in an Utusan Malaysia interview with PEKEMA president Datuk Zainuddin Abdul Rahman.
In the interview, Zainuddin said that Proton’s new leadership, spearheaded by chief executive officer Li Chunrong, no longer places importance on the bumiputera agenda, adding that its new policies are putting undue pressure on dealers. Among them, 1S dealers – which make up the majority of Proton outlets – are given only a year to upgrade to 3S centres in order to be given an opportunity to sell the company’s first ever SUV, based on the Geely Boyue and set to be introduced in the fourth quarter of this year.
Zainuddin also said that Proton is reducing dealer profit margins from four to three percent, discontinuing financial aids such as Payment After Registration (PAR), and implementing restrictions on dealers should vehicle stock go unsold after 60 days, as well as providing a special 10% discount directly to associations, instead of leaving it to dealers.
Additionally, potentially unhealthy competition among bumiputera and non-bumiputera dealers, along with a non-bumiputera leader said to be unwilling to help bumiputera dealers were also listed as factors that could lead to the downfall of PEKEMA dealers.
In a point-by-point rebuttal, Proton stated that dealers are actually encouraged to complete the upgrade to 3S and 4S centres between 2018 and 2020. The 2018 target is merely meant to substantially increase the number of 3S and 4S centres – which currently make up only 30% of its dealer network – in order to enhance Proton’s overall customer experience by the time the new models enter the market starting this year.
The national carmaker said it is aware of the substantial capital required for the upgrade, and is offering upfront support as well as an increased profit margin on cars sold for up to three years. Proton has also lowered the monthly volume threshold required for dealers to enjoy the maximum profit margin available – previously 40 units for a 4% margin – although it did not specify the new threshold or margin.
This is in line with the current challenges faced by dealers, Proton said, adding that it will continue to monitor the situation to ensure business growth is achievable. The company is also providing a quarterly incentive scheme throughout the year, enabling dealers to earn extra income by exceeding their sales targets; it will also provide state incentive support for on-ground activities.
With regards to the restrictions on dealers due to unsold cars, Proton said that the 60-day period it has provided is significantly longer than the usual 14-day period that is industry practice, and comes with terms and conditions. This is done to manage dealer cashflow, giving them additional time to move their current stock without worrying about their accounts being blocked.
Proton added that the Payment After Registration (PAR) scheme is not practiced by other car companies in Malaysia, and has been ended in light of the company’s tight financial situation. It said that it provides a total of RM650 million in dealer financing every year, which is putting a significant strain on its cashflow.
The issue of direct discounts to associations has also been tackled – Proton said that corporate fleet sales made up less than five percent of overall sales in 2017, so dealers are encouraged to focus on retail sales. The company also said that its aforementioned new margin scheme is meant to prevent disorderly marketing among dealers, and that Proton is guided by laws and regulations such as the Anti-Competition Act.
Proton sought to assuage additional concerns on the part of dealers, saying that upon the signing of the partnership agreement with Geely, the company established a 10-year business plan focusing on products, operations and sales growth. It added that it conducted detail studies to come up with a comprehensive product strategy over the next five years, and with the infusion of Geely’s technology, expertise and capital, Proton is confident of forging a path towards a turnaround and sustainable growth.
It also said that the new SUV will be positioned as a premium model, and that Proton’s sales and service experience will be carefully managed as a result, in order to exceed customer expectations. As such, Proton’s 3S and 4S outlets will manage sales of the SUV exclusively, but 1S centres will still be allowed to sell the SUV through 3S and 4S outlets closest to them. This ensures that all dealers will have the opportunity to sell new Proton models – as long as all requirements are met.
Proton concluded by recognising the efforts made as well as the successes achieved by itself and its dealers up to this point, and that it intends for dealers to prosper instead of being burdened. It added that its turnaround process is long-haul, and that Proton, its dealers and business partners must first excite and serve the market as much as possible.
The company said that it hopes to grow its business with its dealers to create confidence in the public and enhance brand perception with a renewed customer experience. As such, its business model needs to focus on market requirements that are sustainable in the long term.
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Here is clearest proof that Gov has cut strings with P1.
Time to go up up up!
Soon, Geely will get fed up with all this special privileges. It is a matter of time before they bungkus.
Government will play hardball because most of the 1S service centres are all run by their own cabinet cronies.
So…..who will win?
The 1S service centre lesen only given to a select few. And they will be protected at all cost!
Proton Msians got your back
https://paultan.org/2018/02/05/proton-will-not-be-allowed-to-sink-najib-tun-razak/
Even without Government orders, Perodua can do so well. How come?
Michael Koh, you actually answered your own questions.. I believe the very fact that Perodua can do so well is because there are not govt. orders.. govt intervention.. govt meddling…etc. etc. Plus.. you have the Japanese behind in the background pulling all the levers in Perodua.
To secure all welfare & livelihood. Tongkat protection is the sole option.
None of my neighbours bought a Proton in the past 5 years … its fate is like Blackberry and Nokia.. you can come up with all sorta models and sales gimmick but consumers’ sentiment hard to return. Trust and confidence eroded – buyers betrayed many times
This shows Li Chunrong means business. He knows how to run a business. Geely started in 1997. Proton started in 1985.
And yet Geely made US$30 billion in cash last year.
How can a younger company be so intelligent?
Fun fact:
Perodua Axia total sales > Proton total sales
1S or 10S … who cares anymore Proton
I beli Perodua Myvi dari 1S dealer.. banyak Perodua dealer 1S….no problem. Problem bukan berapa S dealer ada… tapi imej produk. Kasihan betul, masih keliru CEO ini
Keyword here is convenience, more 3S centers means buyers don’t have to go as far to get the necessary services for their cars.
It’s only one part of the overall experience but it’s a basic one that every carmaker needs in order to convince people to buying. The CEO knows what he’s doing
just like banks, 1S can merge amongst themselves. Malaysia too had about 100 banks before, now only about 10
I agree with you. Rakyat already dont want any proton anymore
60 years of Merdeka and we are still talking about bumi and non bumi issues.
Look at Singapore. They never had all this special treatment. This is why they are first world. Their GDP per Capita is 10X that of Malaysia.
amazing, 60 years after Merdeka, still want to talk about Bumi and Non Bumi issues.
What’s so surprise of country who worship rich foreigners and practice capitalism at the cost of its normal citizens? High ranking jobs,Better post job all gip to foreigners. Their local citizens left to clean tables at food court.
Better local citizens to clean tables rather than non citizens such as Bangladesh, Myanmar or Indonesians. Because those monies will stay on the country than going out.
So shy to read about special discounts and laziness
Is this why Singapore SGD is 3.2X Malaysian ringgit???
how can perodua sell 200,000 cars but proton dealers only sell 70,000 cars?
Perodua is a success…why?
Pipu buy P2 becoz its cheap not becoz its gud.
not true. few million perodua owners all very happy. Even local grads dont buy Proton anymore
Not true. Few million P1 owners all veri happy as well. Local grads dun buy P1 becoz they now richer and can affords for non-nationals.
Last in JD Power customers satisfaction also veri happy? U must have a skin thick as a tree bark or veri ignorant
Last in JDPower is Honda lah! PT can search it, so stop with the fake news.
John is an example of syok sendiri fella. Like Proton, they only up vote themselves to keep themselves happy. Typical jaguh kampung mentality
P1 also cheap but nobody buy. According to ur logic, it’s becoz it’s no gud?
You sounded rich and your are a foreigner. Try to SG find a high post job. Come back to this forum only after u found the job…
– I Have Just Added A Comment –
to achieve like what singapore has achived, focus on the basic need in a country development – education..
no more sk/sjk laa..all under same school..the benefits are huge..ask the singaporean..
and change everything to English as first language. can or not?
Our education flip flop…..every year changing format. one day english one day bm
Just like petrol station owners……
Time to abolish all the nonsense. Especially housing discounts.
Exactly, that bumi housing discount is a curse. I didn’t even want the discount but was forced into it because developer had a damn quota! Now ada rumah mampu milik everywhere, can stop this bumi discounts scheme for mass market condos and premium housing already!
If u find it difficult to take the diskaun, can alwiz donate the figure to zakat.
You missed the point completely
Took bumi housing discount, tried reselling my properties. not so easy to find buyers
Not really. U try asking the others whether they want that diskaun, sure they will want it. Dun matter whether they even richer than u or not. Thats how they become rich.
Too much of laziness because of all these help over the years
U mean the rich? Yes, I agree.
Too much of pampering. This is why we lost out to Thailand.
Mat Salleh and Japs got fed up with Malaysia and moved all operations to Thailand. They have invested so far few hundred billion USD in Thailand car industry alone plus given Thais about 500,000 jobs.
Better move there. All these factories hires foreign workers, and like what Tommie said, they sends money out so it dun bring benefit to MY, but we saddled with foreign workers problems. Tomyam can have it, no problemo.
How can the rich get rich if they are lazy? Use your brain, john. Only people like you is the reason why the Gov needs to give discount
Rumah mampu milik is for who need. Discount is for who want and able to buy the middle cost houses. U don’t want but u buy, then u curse. The mess is in u, every one else are willing to get the discount. Blame yourself by accepting the sales from the developer.
High income Msians can sapu all kinds of rumah by 2020.
Zero sum game. I want mid-cost house but don’t want the bumi discount. Developer said cannot, bumi must buy bumi lot. Cannot buy non-bumi lot. I dont want a rumah mampu milik, I want that damn condo. You not in my position so you don’t understand.
Ask any non-bumi if they wish to forego that diskaun if given to them, and they will look u funny.
John, go read up property investing lah. I thought you were smarter than this.
this is why we need 1.6 million Government servants to serve 30 million Malaysians whilst Australia has 250,000 Government servants to serve the same 30 million Australians
There are vast differences in definition of government servant in Malaysia and Australia. The 250k figure doesnt include local/state civil services. And i dont think in australia teacher, doctor and police inculded in that figure.. u should check your fact..
Because we consider all workers paid by government as civil servant, unlike other countries they exclude education service, military, police from their civil servant definition.
Based on that logic, we shudnt pay our polis, army, bomba, doctors, teachers & of cuz, civil administration. They all shud serve u for free, isit?
That side income is fantastic, really bombastic !
When you get into business, you need to be fully commited and serious about it. Otherwise get out and let others handle it. There is no waiting and helping games in business.
They owe you nothing; but you owe them everything.
Looks like some people are already making up excuses for not being able to deliver what’s expected of them in a revitalized Proton.
It’s 2018. It’s about time certain tongkat policies end, otherwise you will never be able enough to compete properly lah. And I’m a bumi and am full of shame to see these bumi policies still being demanded like it’s their God-given right. Ini salah Tun M juga.
Just let the China CEO has a freehand, or else Proton
will end up like MAS, Perwaja etc.
Lol awesome response by Proton. Never once did it mention anything regarding bumi issues raised by Pekema. All is fair and square in the open market.
As a proton customer, just look at the level of service in most proton showroom. Tidak apa attitude…
But, in some proton showroom, service is good! Why?
Because the boss is around, boss is serious about his business. Just like any other business, you reap what you sow. You expect to make money but you are not doing the business seriously…. How can you survive?
Look at any businesses where the bosses are around, the business flourish.
As a proton dealer, after 33years, do you expect a customer to buy from a 1S centre? It just shows that you are not serious becoming a proton dealer! If you are not serious, how to make money?
Talk to your bank…
Get a loan to upgrade your showroom….
Be serious when you doing business….
Do it as though your life depends on it….
And, customer will seriously buy from you!
Remember, you reap what you sow!
If Proton continue working out with such work , i am sure proton will get back profit in one year by reducing unnecessary costing.
I am not accountant or financial people but seeing a lot of tongkat 1S Proton dealer really drag PROTON down.
Around the world, business is business.
Business should not be colour blind.
Business is about competition. Competition drives improvements.
If you are good doing business, you can do business anywhere, everywhere with anyone. You still can florish.
However, in Mesia, it’s a real long and sad story always about Bumi this, Bumi that. After so many decades of protection and special treatment, still no shame? and ask for more…
Good lah all upgrade. not enough service center, my gearbox problem until my warranty expire also not solve. Stupid.
Ur car brand was wrong one, U shud go to VW for that Golf.
balik2 gearbox problem..basi dahhh…
Proton did not refute one of the revelations of PEKEMA – that the Boyue will be sold at RM100k and these dealers foresee that it will be a sales failure in light of the wealth of better competition at that price range.
Looks like the Boyue is destined to be another massive failure just like the Ertiga and Perdana..
Yo bro. If the price reach 100k and come with 1st class of services with it, people would buy. The biggest problems with Proton is their after sales service which is sucks for the past 20 years. So, to remove those torns, extreme measure need to be taken. Damn cronies.
This is Mahathir mentality legacy. Among the chief reasons why Malaysia’s automotive industry lose to non-English speaking Thailand. I sincerely hope he will not become PM again or these monkeys will have a field day. Anyone but him.
Geely China doin a good job!
They are doing what a good business should do i.e cost down, improve delivery and efficiency.
Right now the new Proton Management not only have to make physical and structural changes to the company, they also have to change the mindset of their employees and dealers. Success is a tripartite effort.
Geely Chinas doing what a good business should do. Geely doing what a good CEO previously afraid to do.
A loosing business at proton to the market, these PKM still shout about it …No business you own 0s also can’t sell
I Like this CEO. :)
After all the dirty and bad deeds done to the rakyat, P1 is suffering from karma. No amount of money can save this company,
Just like the curse of Mahsuri that plagues the islander for 7 generations….
As a Bumiputera, I am ashamed of these claims. It would seem that this are the batch of dealers who managed to get their licences during Tun M’s era. The easy way.
But times have changed. The automotive business environment, the availability of easy information, new safety legislation, high fuel prices, product reliability, customer experience, after sales service, etc, have changed.
PROTON the company must first survive, before the dealers can have products to sell. What is the use of empty showrooms?
Learn to adopt to changes, like any businesses, or perish like the Dinosaurs.
Not to mention the liberalisation of trade through the various Free Trade Agreements we have signed. Businesses have to change with the market conditions or die.
Some people still expect everything to be served to them on a silver platter. It is the 21st Century. The time to roll up your sleeves and put in some honest work is long overdue.
Proton, don’t force your dealer. Just sell your car through Lazada. Inductrial Revolotion 4.0 la now. 2050?
If Perkema dealers find it hard to sell Proton, switch to Perodua. Easy peasy lemon squeazy.
They’re the ones that led Proton to the mess they’re in anyways in the first place!
Not easy when u have invested millions into ur business.
What about the millions these dealers have made over the years? Why can’t they plough back some of it to expand and improve the business?
And if they were losing money then why continue? Why not just “gulung tukar” to cut loss?
Actually it is Proton who are losing money, not these dealers.
Not it isnt. P1 has to subsidise their operations for way too long. Now its free to take control of its losses.
The current Proton management do what they want to do to grow the company. If this and that cannot, they will then sell their share and its gonna be even worst… Proton stop functioning and all jobs lost. These guys try to turn Proton into a profitable company and if the government put their hands into it, they get feddup and leave. See other abandon projects. PAKEMA, are you saving proton or killing it?
The new Proton Management foresee a surge in demand for their new range of cars. This is very positive.
But it has to be backed up by actions, one of which is to improve after-sales service to cope i.e. to upgrade to 3S or 4S. This is being pro-active.
There are a couple of European brands which didn’t do this here. Frequent breakdowns and poor after-sales negated good marketing many times resulting in their sales plummeting.
The formula for home grown Proton to succeed is very simple. Just give local consumers a decent product in terms of quality, price and back-up. One more thing, politicians should stay far far away from the Company.
True dat. Actually a lot of people are waiting for the new proton suv. And if the price is right, the demand would be skyhigh. But this would be true only if proton could restore their customers belief in proton and one of the way to do this is by improving their services. I totally support the new ceo decision. In business, u need to get out of your comfort zone to succeed. And proton has been in their comfort zone for wayyy too long.
Proton shud focus on getting their bread and butter products to have better quality.
Ppl know what is good and what is bad. U give them good quality products at affordable price, ppl will buy.
Thats why Proton, KiA and Hyundai cant sell. They give consumers rubbish products .
Learn from P2 and Honda. The importance of quality products is of utmost importance.
Proton failed because
1. Lousy quality car
2. Focusing on niche market(Lotus Handling) . Most buyers at that price range dont give a crap about that.
3. Lousy marketing department (Not dynamic). Still kampung style.
4. Lousy service centres.
If proton wants to do well again, pls rectify these issues. And i doubt a China brand like Geely is gng to help them. What they need is a Japanese Partner.
China cars are worst that Korean cars which are already lousy at best. What u want is a experienced Jap partner who can provide technical expertise on making a better car.
Proverbs 12:15
A stubborn fool considers his own way the right one, but a person who listens to advice is wise.
putting kia and hyundai on the same par as proton? seriously, u still in the 90’s?
No Proton is worse than Kia and Hyundai. But KIA and Hyundai are shitty enough. So u get the idea how bad Proton is.
KIA and Hyundai cars are really lousy. Pls wake up la. Their poor sales figures speak for themselves.
Do you means that lousy Hyundai + Kia sold 7.2mil and shitting China Geely sold 1.2mil car worldwide last year. It even outsold numbers of Jap car maker. Expand your view horizon, we are not in 90’s nowadays.
Things change and the Hyundai and Kia poor results in Malaysia was due to SD motor and Naza problem.
My Korean customer was AMAZED and puzzle with the low spec and high price of Hyundai car in Malaysia when he made his visit to Malaysia. He say this is a whole different spec compare those car in Korea, US and Europe (coz he travel a lot to US and Europe).
Dun want Jepunis technical expertise for engine, steel, airbag, QA, or axles. Pretty much the whole car then.
Since when Honda got quality? its only the brand name lah!
Last time they said after rebadging Mitsubishi Lancer and Proton will be saved.
And today, Proton Bayu….?
If PEKEMA 1S dealers can’t upgrade to 3S after being in business for 20+ years, then something is seriously wrong with your approach to business. Sorry lah, if like that, baik gulung tikar, jangan terus rugi lagi. Bagi orang lain yang nak berusaha peluang.
Mofaz dulu pun ada Proton 1S but sudah tutup, pindah & buka Honda 3S yang besar. Business decision, better to close a losing business & reinvest in another that is profitable.
Corrective strategy vs destructive for personal interest won’t last long. The work culture can tell the future development. At the end of the tunnel it becomes like MAS mana Ada system
aisehmann….just allow Lazada sell proton car la…have periodical credit card discount also…we just want lower price lower usury riba’..go to hell with the agendas. its either you swim or you sink….btw…so many associations in malaysia..even bus stop taxi have association…it does facilitate cartel, price fixing, unnecessary pressure to industry and consumer…i think the gomen should seriously look into these associations and cartels…
Keyword – ” tongkat.”
I don’t wanna fork out a single sen and demand that Proton provide me with everything.
Hello ? Wake up, time to merge or close shop if you cannot compete.
Don’t blame others for your shortcomings.
Proton is a car maker(not car producer)there just play like contractor,their role just assembled the part of the car supplied by vendor. After more then 30years in car industries they can’t produces any small car engine. They survive thru gov.subsidy not like a genuine Business Entity.I’m glad when gov.sold Proton to foreign Company,(no burdens to shoulder by Gov.) lets them did the right way how to produce quality car and makes money out of it.
You are right . In order to survive in any we have to learn how to compete, more so we are living in a globalised economy. I believed in times to come the Malays and Indians will learn how to compete. My observation that in one of the flat areas that I am staying, I observed they are 3 Malay provision shops competing among themselves and they survived for the last 10 to 15 years. These are the Malay business men that can progress to more complex and profitable business
Yes, as a car maker, Proton should have done a better job in assuring their vendor product quality.
Though Proton do manufacture all the body stamping parts and engine, they should have do better in designing new engine and technology stuff.
I believe most rational people in Malaysia feels good with selling Proton stake to someone who really doing business, not those who always talk about Proton future but do nothing to improve.
with this tongkat mentality, P1 will be forever hutang-hutang, lelong-lelong and need-bail-out by the govt….
Geely dont give crap about Proton. Their concern is more in the manufacturing facilities.
they only want to be spoon fed ^^
The government is still protecting Proton by ensuring competitive brands & their models are priced higher than that sold by Proton. This now includes the Boyue. Hence you have CHR, CX3 & CX5, CRV at a significant higher price bracket than RM100K. Even it’s China competitor Haval H6 targeted to be available this year has been selved due to high tax putting it beyond resonable market price. Few days ago PM announced the Government won’t let Proton die & will continue to ensure it’s survival. So what is this Mr Li talking about on the special previlages? By right it should be removed for Proton.
Want lower car prices? Then u need to change Gov