“I’ve been here seven years, I’ve never seen so many new brands coming into this mature market. At least 15 new brands and 35 models came into Malaysia, and a majority of them are Proton’s competitors.”
So said Proton CEO Dr Li Chunrong at last night’s Chinese New Year media dinner, while showing a slide of all the Chinese brands and their models either already on sale in Malaysia or coming, and their volumes.
“For customers, this is good because you get more choices. That is 100% correct, but in the long run, your car may be orphaned (if the brand exits the market),” he said.
He explained that if production numbers cannot be sustained over a long enough period, the low volume/orders will negatively affect local vendors and parts suppliers in Malaysia.
51% of the 35 new models are electric vehicles (EV), which is unsurprising given the current tax-free entry conditions, but what’s perhaps more of a revelation is where (or rather how) they are assembled.
The slide makes a distinction between fully-imported (CBU), semi-knocked down (SKD) and completely-knocked down (CKD).
It showed that 77% of the 35 new models are CBU, 20% SKD and only 3% CKD (one out of 35). Although Malaysia has minimum local content requirements to be considered CKD proper, the terms SKD and CKD are often used interchangeably in this country. Most carmakers use the term CKD even with little to no localisation.
“(Car brands) in Malaysia will have to do localisation (for local assembly), because I don’t believe the Malaysian government will allow you to only do SKD (as opposed to proper CKD),” Dr Li said.
While he did not say which model was proper CKD, he pointed out the Jaecoo J7‘s volume as an example of one that could support a full CKD vendor ecosystem. The Jaecoo J7 is made in Chery’s own plant in Shah Alam, as opposed to contract assembly.
His point is, while it’s all well and good to have more brands and models coming into Malaysia, it may also have detrimental effects in the long run if the market doesn’t get proportionally bigger.
Local assembly programmes really only benefit the local vendor and parts supply ecosystem once they hit a high enough volume, which then needs to be sustained over a long period.
Failing that – and with more competition, each model’s chances will only become lower – both vendors and end consumers risk being left out in the cold, the former with unprofitable low orders, the latter with the possibility of the brand exiting the market completely. Basically, choose your next car carefully, says Dr Li.
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tutup je lah
You mean look at Thailand market all eat each other. Its good that we still have Proton as a stable base with long term outlook rather these here today gone tomolo brands.
Dr Li implying nak bercherai…he is giving ample warning…the dwindling sales ..that’s why they moving to Thailand, Vietnam Indonesia.
In case you don’t know. Proton also switch the parts from local vendors to China vendor, on Locally developed models like Saga Iriz Persona etc.
Pot calling Kettle black, while those truly support local vendors like Perodua and Japanese brands diam diam saje.
If local vendors cannot compete in terms of quality and price, u still want to buy from them?
The difference is that Proton is trying to have it both ways — trying to play the “national car ” card while still moving as much as they can back to China. And remember all the big talk about export, how Proton would be Geely’s RHD (then ASEAN) production and R&D hub? And now Geely is pushing Proton aside in almost all markets… even R&D is being shifted to China.
So the question remains…why are they still a protected species? There’s basically next to nothing Malaysian about them at this point, might as well wind back the protections that were first imposed in 1985 for Proton’s sake. We had a competitive automobile market pre1985 with more choice. It’s a failed venture (of fantastical proportions).
If, as he says, customers will be orphaned when those new companies don’t exist anymore (and he would know because that’s what happened in his homeland) then the market will decide how to reward those who’ve proven that their brand is worthwhile trusting. In 5 years people will still buy something like BMW or Toyota if these new companies don’t deliver on longevity.
They should have been sold to Peugoet instead of Geely.
if malaysian vendor has no quality, why perodua, daihatsu and toyota can use them, while proton cannot ?
Perodua vendors are all from Indon or at least their factories are all in Indon and P2 vendor imports and rebadges them. So not only P2 rebadges from Daihatsu even their vendors rebadges parts from outside. The same goes for Japanese brands. They diam diam because all their parts comes from Thailand. Nothing is from Malaysia.
Proton meanwhile are upping the local vendors by challenging them to compete with China. That is why each Proton CKD model introduced comes with more local content from start.
We need Proton to continue pushing local vendors to be global players.
If you look at the list, majority are Geely’s competitors in mainland China and abroad. Some are titans as large as Geely like Chery, BYD and SAIC. Some of the smaller brands are no small manufacturer either with 500k to 1 million in sales per year.
So it comes as no surprised that big boss Geely need to come in personally to fend off the influx of rival China brands.
Also X70/X50 is outdated already and need to be replaced with the latest model Boyue Cool and Binyue Cool. Many here are saying all are using the new 4 cylinder engine too. Don’t be like UMW where they brought in the new Camry without the Dynamic Force Engine.
Ckd for what. Make some people rich for no reason. Car becomes more expensive and lower quality.
Aiyo, talk about other brands cannot sustain, buy Proton also same ma, no spare part have to wait also.
He mentioned all the things that actually consumer already know, but still, some will take the risk and buy a new brand, why? Because a lot of people actually have bad ownership experience with Proton.
Geely talk about achieving high volume but ‘tipu’ Proton and set up RHD factory in Indonesia too. Proton was supposed to be the RHD factory for the region.
‘Kena tipu’ all of us.
Consumer needs to be smart loh. Jaecoo so far is having good volume. Omoda by Chery too. But others is questionable other than byd of coursed. In the past there’s gov protection which cause car price very high. Now ph gov decided not to go along so price starts to fall.. but this far only china made are cheap
Buy Geely Proton cars also same what…no spare parts since all made in china….consumers ain’t stupid. If Geely is slow while BYD & others can launch new cars globally, then too bad for Proton. Consumer are well informed & can see that they are getting the same latest tech as with China buyers.
…. and somebody just woke up!
They should also allow cars from India – Tata, Mahindra .. and other countries , skoda , seat , opel and maybe even Lada or the Turkish Togg…
then increase the toll, road, luxury, and every other tax, making it impossible to buy a car.
Use the info for the next GE to announce how many the automobile flourished with all the sub standard cars. Ask MAA to come up with useless statistics and baseless graphs. Wow.. Achievement indeed !! Thank you MAD ani – Pun intended!!! cheers
orphaned and no spare parts, apa bezo?
Supply and Demand depending of market size and purchasing power of the country. When the car price is getting very expensive and with our disposal incomes.
Many opt for a cheaper car to buy and to maintain the car for a longer period before the next purchase. Many still go for 9 years loan with minimum down payment and minimum monthly installment. This is fair to say that our income is not able to support the purchase and we also need to take care other commitment.
With the rising cost of living, as long as my car still can service me with minimum maintenance, i will still have to wait for a little longer before the next change. Typically a car can last 15 years and beyond be it a Perodua, Toyota or other brand if maintain properly.
So this is why car purchase is very important as we need to make sure the depreciation value, spare parts availability and cost of running it that we can afford.
Why EV car is still low in demand (not issue for the trend and rich group of people), we can see it from the history that hybrid car depreciation value is so badly hit, what for EV? especially new brand Chinese EV?
The government can impose tax free on
EV to attract buyer, if pushy, the government can also impose high tax on ICE and fuel cost to force shifting of ICE to EV, the question is are we ready?
When there is a high demand of electricity usage on EV charging, do you think the tariff still remain?
The same happen in Thailand, where they also keep the old car running little longer before the next replacement.
The ability to buy is come down to the money that we have.
When ur got stuck at sc for months waiting for parts,u really have to becareful with “this” brand.
it is just the beginning of an ‘influx’ with mass varieties of choice. at the moment everyone is new or relatively so. the real challenge is always after sales – parts and services. if any of them can really prove this to be their stronghold then no one really bother to kacau. tapi kalau nak tunggu windscreen replacement pun dekat 6 bulan, boleh blah lah.
Don’t talk nonsense Li. Where is your promise to send Proton’s to Asean? Janji palsu as usual.
These mainland Chinese are too much. They are overflooding the global market. The good news is nobody wants these cars anyway. Good, can’t wait for them to go bankrupt one by one. I support the US, Europe & Japan sanctioning of China.
Pour sour grape…cannot compete say laah…adoi…same same like the neh umw