Malaysian carmaker Proton to compete with Toyota and Honda in terms of quality, says CEO

Malaysian carmaker Proton to compete with Toyota and Honda in terms of quality, says CEO

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Proton CEO Li Chunrong. (Photo: D Kanyakumari)

KUALA LUMPUR: Malaysian carmaker Proton has reinvented itself in terms of quality and branding, said CEO Li Chunrong, adding that the company is now competing with global players such as Toyota and Honda.

In an exclusive interview with CNA on Wednesday (Dec 11), Mr Li noted that Proton had previously faced quality issues. However, the company has made great strides in this area, he said.

“That (quality issues) was the problem with Proton before, they did not have the resources to (look into quality)," he said.

"But now with the expertise and the resources from Geely as well as the experience of Proton as a national carmaker, we would be able to produce better quality cars.”

He added: "With our new product position, our competitors are Honda and Toyota."

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The Proton X70 assembly line. (Photo: Proton)

Going ahead, he wants Proton to focus on the finer details so that it will move into the "high-end" category.

“PERODUA IS NOT OUR COMPETITOR”

Transitioning from what many Malaysians refer to as a “basic car” to a “high-end car” is part of a 10-year plan for Proton, Mr Li said.

“Perodua is not even our competitor (anymore) ... Why? Because of different product position,” he said, referring to the national carmaker.

He said the turnaround efforts over the last two years have propelled Proton far beyond its local counterpart. in terms of its market positioning.

“Our Saga is much better than their Bezza,” he claimed. The Proton Saga sedan has been recently face-lifted, while the Bezza is Perodua’s first-ever sedan.

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Proton has a total of 10,000 staff in Malaysia. (Photo: Proton)

For years, Malaysia's first national carmaker was in the red and reliant on government loans, capital injection, and incentives.

In 2017, a 49.9 per cent stake was sold to China’s Geely. With Mr Li at the helm, Proton is expected to break even this year and make profits next year.

As for Perodua, it has been ahead of Proton in terms of sales volume. Perodua is known for producing quality small cars for the same price or less than Proton.

According to Malaysian Automotive Association's (MAA) statistics, Perodua sold 22,808 cars in October, while Proton sold 9,803 cars.

X70 AND SAGA MODELS KEY TO COMPANY’S TURNAROUND

Mr Li said public trust in the Proton brand was redeemed after the release of the X70 sports utility vehicle in December last year.

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The Proton X70 has sold 26,000 units since it's launch in December 2018. (Photo: Proton)

“We sold 26,000 of the X70 in the last one year and although that did not meet my target of 30,000, it was considered successful,” he said.

He added that the facelift of their PIES models also contributed to a renewed image of the brand.

“PIES stands for Persona, Iriz, Exora and Saga. We took 16 months to develop the five models (including X70) and we launched all of them in a span of eight months, which is number one speed.

“Following the launch, the new Saga has contributed greatly to the sales of Proton cars,” he said.

He said the Saga made up 70 per cent of Proton's sales while the X70 contributed 19 per cent.

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The Saga model has doubled in sales since it's face lift in August 2019. (Photo: Proton)

The Saga which was selling around 2,200 units per month three years ago, has been selling 4,000 units a month since August.

“That is double the sales," he said, beaming proudly.

INCREASING EXPORTS TO PAKISTAN AND EGYPT

On the back of Proton’s rapid transformation, Mr Li said it will seek to become an “international brand” by 2027.

In particular, he wants to boost exports.

He noted that Thailand, which produces two million cars annually, actually exports one million units.

“That is 100 per cent export and take Indonesia for example, their export is at 30 per cent. With Malaysia however, exports are only 3 per cent,” he said.

He added that for Proton, the best export performance was in 2005, when it exported 20,000 annually.

“But in 2017, the numbers reduced to 200 cars per year. Why? Because of the product,” he said.

READ: Malaysia's Mahathir revives possibility of joint car project with 'closest neighbour' Indonesia

The carmaker's current single largest export market is Egypt, where it is producing left-hand drive cars for the Saga and Exora models.

In the last two years, Proton has been able to increase its exports to 1,000 units.

“But that is not enough. Once we launch our upgraded models next year, our exports will increase and our aim is 5,000 cars a year,” he said.

Mr Li also said that Proton would like to ramp up exports to Pakistan, where it is collaborating with a local partner to establish a manufacturing assembly plant.

He added that more market research is needed. Asked about a target on when Proton cars will be sold in Pakistan, Mr Li would only say that the project is in progress and it would be executed as part of the 10-year plan.

Source: CNA/kd(aw)

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