The Malaysian Association of Malay Vehicle Importers and Traders (PEKEMA) recently held a press conference addressing two issues. The first is a plea for a longer period of transition for current Proton dealers to upgrade to 3S or 4S centres, and the other is to get the government to provide soft loans from the Bumiputera Automotive Fund it has been collecting from PEKEMA members (up to RM10,000 per AP) to facilitate the upgrading works.

According to PEKEMA president Datuk Zainuddin Abdul Rahman, Proton dealerships that are operated by PEKEMA members want the transitional period to be stretched to December 2020. Previously, Proton is only giving its dealers a one-year period 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 (set to be introduced in the fourth quarter this year).

The association claims that the one-year period is too short (the dealership upgrades must be completed by October), and there was no prior briefing given by Proton to its dealers. Several PEKEMA members, which are also Proton’s dealers, also chimed in on the matter.

However, Proton revealed on February 12 that the original term for the 1S centres to upgrade to 3S/4S facilities is in fact up to 2020. It stressed that only those who are (financially) able to upgrade by October 2018 should do so and will be given priority to sell the new SUV.

The new Proton SUV, based on the Geely Boyue, will only be sold through 3S and 4S centres

Proton said it won’t be a problem if 1S dealers are unable to upgrade, except that these facilities will be deemed unfit to sell its new SUV, which will be positioned as a premium flagship model. The reason is because Proton aims to provide a holistic customer experience (part of Proton’s turnaround plan), from purchasing to after-sales, and that 1S centres only function as sales outlets and nothing more.

That said, given the sales priority to Proton’s 3S and 4S outlets, several 1S centres will still be allowed to sell the SUV through 3S and 4S outlets that are within the vicinity. This ensures that all dealers will have the opportunity to sell new Proton models – as long as all requirements are met.

As for the automotive fund, Zainuddin said the government has collected over RM3 billion from contributions made by every AP holder and PEKEMA member. “According to the terms of the fund, 20% would be used to assist the Malaysia Automotive Institute to build capacity, 40% for PEKEMA members to expand their businesses and the remaining 40% is to assist Bumiputeras involved in the motor vehicle industry,” he told reporters at the Wisma Yayasan PEKEMA yesterday.

“Therefore, PEKEMA proposes that 40% of the RM3 billion, which is RM1.2 billion, to be disbursed to Proton dealers as soft loans at interest rates of not more than four percent. We ask the government to consider letting us use the funds so we can upgrade the dealerships,” Zainuddin added.

Proton dealers and distributors are expected to meet with the Ministry of International Trade and Industry (MITI) today to discuss matters surrounding this issue. Meanwhile, Zainuddin said PEKEMA will also meet with Proton’s chairman, Datuk Seri Syed Faisal Albar, next week.

At this rate, you must be wondering, just how many PEKEMA members actually operate Proton dealerships? Well, according to Zainuddin, there are 25 Proton dealerships run by PEKEMA members, 11 (or 44%) of which are still the basic 1S centre. Proton has roughly 400 dealers nationwide, and 70% (or 280) of them are 1S centres.

Concerning Geely, Zainuddin said PEKEMA is not against the company. “It is not because we (PEKEMA) do not support Geely. It has a good track record, such as growing Volvo until it reaches £1 billion (RM5.3 billion) profit, and PEKEMA believes Proton will be like Volvo in the future. Nevertheless, Geely needs to explain to Proton dealers its aspirations. We hope Geely will not be too forceful or issue top-down instructions to dealers,” he said.

Tell us, if you were to be in Proton’s shoes, what would you do?