Proton Edar dealerships to be sold to EON – report

Remember EON? For those old enough, Edaran Otomobil Nasional (EON) was synonymous with Proton, pretty much like what Auto Bavaria is to BMW and Cycle & Carriage is to Mercedes-Benz. Now, word is that EON could soon be back selling Proton cars.

According to The Edge, Proton could undergo a restructuring exercise that would see it split up its sales and car assembly divisions. According to sources of the business daily, Proton has plans to sell dealerships under its wholly-owned Proton Edar unit to EON, and palm off the rest of the dealerships en bloc to others.

“For instance, if EON is not keen to handle the Sabah and Sarawak sales, then Proton may seek parties interested in taking over that business. But EON has sort of a right of first refusal,” the source said. It’s understood that groups that may be keen to take over the dealerships that EON may not be interested in, have already been identified.

The source adds that this move can be easily completed as EON is wholly owned by DRB-Hicom, which has a 50.1% stake in Proton. China’s Geely owns the other 49.9% of Proton.

According to The Edge, a CTOS check reveals that in its financial year that ended in March 2019, Proton Edar posted an after-tax loss of RM159.24 million on the back of RM3.85 billion in revenue. In the previous fiscal year, the company incurred losses of RM271.52 million from RM3.3 billion in receipts.

Also, Proton Edar had RM289.92 million in accumulated losses as at end-March 2019, RM1.02 billion in total assets and RM1.29 billion in total liabilities. However, full contribution from the strong-selling Proton X70, which was launched in December 2018, will only be reflected on paper end-March 2020.

Proton sales are on the up. Last year, the revitalised national brand jumped to the runners up spot from fourth in 2018, the only change in the top 10 standings. It was the biggest mover in 2019 too with 100,183 units sold – that’s an additional 35,439 units over 2018’s total, or a massive 54.7% jump. That’s from a full year of X70 sales and the revamped PIES (Persona, Iriz, Exora, Saga) range, and will be reflected in the financial year ending March 2020.

Before the Covid-19 pandemic triggered a global health and economic disaster, Proton declared a 32% higher sales target for 2020, to be fuelled by the CKD locally-assembled X70 and the much-anticipated “X50” crossover. However, as with most businesses, this will have to be revised.

EON was established in 1984 to distribute Proton cars, but after a fallout with Proton’s management, the carmaker set up Proton Edar and relegated EON to super dealer status. In 2009, EON and Proton signed a master dealership agreement, and the resulting consolidation saw EON outlets migrating to Proton Edar. It was at this point that EON ceased to be a Proton dealer.

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