The price war initiated by Chinese automakers may significantly impact the Malaysian automotive industry, particularly original equipment manufacturers (OEMs) with local operations. This is according to Proton deputy CEO Roslan Abdullah, who added that while discounts benefit consumers, they also negatively impact local vendors who supply car components and parts.
“The price war doesn’t just impact OEMs with manufacturing and assembly plants in the country, it also affects local vendors and distributors. This situation leads to increased stockpiling, as customers are drawn to cars offered at lower prices. At the same time, some customers are adopting a wait-and-see attitude, hoping that prices will drop further,” said Roslan, as reported by NST.
The used car market is also affected by a price war, as the significant price cuts lower the resale value of cars. “For example, if a Brand A vehicle is initially purchased for RM100,000 but later sold at a discounted price of RM80,000, it will significantly affect the vehicle’s depreciation. The trade-in market will also suffer as a result. This trend makes customers more likely to purchase new vehicles, as the prices are more competitive compared to used ones,” explained Roslan.
He added that local OEMs are unable to compete in a price war with Chinese brands because of higher operating costs, including manufacturing, vendor and supply chain expenses. “OEMs must ensure business continuity. We can’t lower prices too much, but we can offer discounts or promotions, such as cash rebates and accessory packages, to help offset market prices,” Roslan said.
In Proton’s case, Roslan said the company employs over 7,000 workers and has more than 5,000 workers in its sales network. As such, it is important that careful measures are taken to ensure the company’s long-term profitability. “Large-scale vendors may be able to survive due to their partnerships with other brands. However, smaller vendors who rely on a single brand will be impacted,” he said.
Roslan pointed out that brands offering lower prices benefit from the completely built-up (CBU) or semi-knocked down (SKD) concept, both of which require less investment compared to local OEMs like Proton. “Their investment in Malaysia remains minimal, allowing them to offer significant discounts due to lower operating costs. However, this creates long-term pressure on companies operating within Malaysia,” he said.
“While foreign direct investment is a key target for the government, it’s important to review the situation to ensure that local assembly or completely knocked down (CKD) brands with their own factories and vendor networks can remain competitive,” he added.
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Inilah namanya competition Encik Roslan. Tak pernah dengar ke?
Crony vendors officially set up by national car maker to replace all quality components with inferior parts while selling at high margin just to cheat every Malaysian and we won’t forget about that until today and still even with 30% reduction in prices they are still getting loads and now whine somemore no wonder cannot go further.
Do not interfere “free market”
Ignore whether China govt
subsidize the export onot
People give discount
We take The MAX
https://paultan.org/2024/07/29/thailand-facing-massive-oversupply-of-evs-ice-automakers-local-parts-vendors-also-paying-the-price/
This is whats happening when competition is not controlled. It kills the local industry. Tak paham maksud Encik Roslan ke?
here comes the crybaby nagging for declining sales..
I was at a recond dealer 2 weeks ago. He had rows and rows of the new Harrier. So I asked him why, as the Harrier was known as a hot car, would come in and get sold within days, and some even get sold while in transit!
He explained that the buyers are flocking to the middle kingdom brands. Chinese cars offer more bang for a customer’s buck, sometimes for way less than a fully specced Harrier.
Chinese brands, EV or otherwise, GENERALLY are brand new, full of features and toys, and under very long manufacturer’s warranty. Now, while they are very good and dependable, the majority of the Harriers available here are used vehicles, needs a warranty top up – that too covers only some parts – and lack plenty of the toys the Chinese brands offer as standard.
So it isn’t all about the price wars alone. There is now a realisation that China makes good cars. I say good, but I can’t speak of their longevity as a vehicle, or as a brand, for example. Neta has just shut down their Singapore operations, their Malaysian models have been hit by a zero ASEAN NCAP rating (proof that not everything is gold). Even in China, Neta is suffering.
Still, if you base an assessment of longevity of quality and standing years as a vehicle, Geely models badged as Protons seem to suggest China is on the right track. Yes you have the lemons with broken bits and bobs, and the spare parts availability caused by Proton themselves, but the X70s and X50 seem to last.
Who is to say Asia isn’t going to reap the dawn of a new automotive bloc? Trump is doing all he can to damage the American economy, so perhaps tnings could get roster for all in Asia. And it is likely to be led by China.
Trump might be helping consumers in the whole world by lowering prices in the long term.
“company employs over 7,000 workers and has more than 5,000 workers in its sales network”
Why is not 5000 in R&D and manufacturing?
There’s no R&D. Kakakaka. Many has already left to P2 and some OEM companies.
Cause Proton can now tap into a larger pool of shared R&D resources from Geely to Volvo Cars to Zeeker so they don’t need all that R&D manpower when going it alone. Otoh, salesman bring in sales, so…
Evwn eMas are CBUed in Hangzhou so what are the differences?
Price war is good for consumer, if one cannot compete in the market will phase out soon, that why we need more value added products and services…
“Large-scale vendors may be able to survive due to their partnerships with other brands. However, smaller vendors who rely on a single brand will be impacted,”
Someone feel free to input here, is being a small vendor to just one brand a normal practice, and a viable business model in the automotive industry?
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And while we’re add it, gov should definitely have a revision on the Automotive Policy to make it enticing for other brands to invest here – Even the Tax Free EV policy, with no update so far will be expiring later this year – Brands invest in neighbouring nations instead that have clearer updated guidelines – These things should be clear, and moving fast
Geely comes into the picture to remediate this with their economy of scale. If Geely cannot help, why sell to them in the first place?
When I got the first job after my graduation, my first car was Proton Saga Iswara Hatchback bought at RM34k in year 2004. The build quality and feature offered I think need not for me to further elaborate. By the way, this car is still my primary car to work today.
What I’m trying to say is, getting a car (at similar price range) today from P1 or P2 as compare to getting one from the Chinese manufacturer, it really not that hard to make the purchase decision at all. How I wish this was 20 years ago…
Your 21 year old Iswara still running as your primary car to work says alot about its quality and longevity. Will we see a 20 year old X70 being used as a daily workhorse? Time will tell..
“Roslan pointed out that brands offering lower prices benefit from the completely built-up (CBU) or semi-knocked down (SKD) concept, both of which require less investment compared to local OEMs like Proton.” Dear Mr Roslan, Proton also have been simply rebadging cars especially all new models introduced in the past 5 years at least. In that sense, isn’t the rakyat now getting the real picture of the cost involved?
I want to study MBA,
How Kodak USA, Nokia Finland and Yahoo USA has flopped while facing the competition.
vendors who rely on a single brand or vice versa sounds like supply chain mismanagement or more precisely…cronyism
If you really concern about local supplier, you have the option to ignore China supplier and source locally. Talk is cheap.
This is a simple knowledge of competition. Instead of competing, Proton had been raise as a baby, before this they share the love to national second baby. And they they start to cry cry and cry! After they get a new step dad to help them evolve, they pulak said they no respect “PROMISE” ini itu, and now blaming other particularly better offered car for their failure to compete! Why not asking how much all this original “PROTON” management salary or paid, and what have they done so far?! all their current selling car mostly from “GEELy” step daddy product and rebadging it! why not just all diam diam and let geely take over the biz if sendiri tak pandai…diam diam jadi board member wait for money cukup la!
You deserve it
Typical. This is what competition looks like. Survival of the fittest, if you cant take the heat, instead of crying and whining and complaining about it, just leave the playground, leave the arena. Cant hang around with the big dogs like BYD now huh? Stop crying about it and do better!
I hate whiners.
Soo Mr Roslan, u suggest to do what? Imposed higher tariff like what Trump is doing to protect US car makers?? Make Proton Great Again like during Dr M time by making other brands price sky high & consumer are forced to buy Proton????
Proton Emas 7 now CBU where got support so many jobs? Price war is on that model only, not Saga also. Proton CKD and sell it below 100k sure win the price war but are you doing it?
Besi buruk
Just support proton, yea price might be different but don’t forget Malaysian engineers effort to bring best handling compared to stock. That is how we can show our appreciation to them. Spare part issue? Bad customer service? Just make noise and demand more! I have driven Waja, Wira SE, The original Persona, Suprima S, Iriz, man their tuning for handling and suspension is good! A lot better than Perodua. I think maybe you need a cheaper vehicle than proton, but just my opinion, I don’t want proton talents go to waste. I hope in future they will involve more and do big exports so that those profits can roll back into R&D and maybe just maybe we can have full sized sedan made 80% or more by Malaysian engineers. Come on Proton you can do it!
DRB hicom is a bAggage geely does not need in proton. And possibly at honda too.
Cannot compete tutup la
P1 cars are only worth buying in the used car market.
Why?
Cause it’s overly priced when new.
Now with even stronger competition, even in used car market after heavy depreciation will suffer.
Protection to P1 cause caused the Rakyat so much over 40 years.
Now, just at the tip of a little competition already crying for help.
Just close shop la.
Being a Malaysian, I’m no longer feel proud of Proton especially after taken over by Geely.
Free Trade!!!
Walk the talk and don’t just talk but no walk.
someone said about proton iswara hatchback. I had one of 2001.I list out my issue for owning it for 9.5 years, big or small problem, you decide yourself.
1) 3 times overheated due to leakage of coolant
2) countless time of burnt headlamp bulb
3) 2 times of power window failure
4) 1 time of rear shaft can not rotate. I pulled the car all the ways from Ipoh to KL. I did not notice it after stopped the car even got strange smell.
@XYZ, what you experiencing I had them all + something else that’s not in your list, and the counting is double (or maybe triple) of yours since my runtime is double of yours.
And just to clarify myself, I’m not complimenting the “durability” of it. I’m just saying, it’s really not worth 34k…
Why of course! why do you expect us as the consumers to soak up the the overly priced cars just to fill the manufacturers pockets when there are better and cheaper options around? we’re not as rich as you guys, we buy according to our means and needs…
good for consumer so what? malaysiaon already tired carrying biawak hidup for past 30 years
This Proton very good at jokes. Duit ada, tax-free ada, Lotus ada, getah untuk tayar banyak, jalan taugeh kat Genting ada, kolab dgn Jipun (look east policy) Mitsu, Cucuki, Honda, ada. Negara sendiri ada P2 dgn teknologi Daihatsu dan Toyota (best carmaker in the world, for now) tapi xde pon kolaborasi sesama sendiri. Teknologi China Geely (enjin ICE, turbo, hybrid, gearbox) ada. So apa lagi Proton mau?
Drop your title as national carmaker, let others do it. I’m sure Perodua is willing to take the P1 title anytime of the day with all the goodies and perks of being one. You’re going down a route very similar like Puspakom. Can’t do it properly? Others will. This is big money, and a question of national identity, so either you get on with it, or get out.