It seems that PROTON has managed to somewhat stem the tide in terms of overall falling sales over the past two years or so. The Malaysian car manufacturing company recorded an overall sale of 70,991 units for 2017. Whilst this was a slight drop from the previous year - 72,291 units in 2016, the actual facts behind the figures show a positive outcome for Proton rather a totally negative one.
The slightly lower number in sales was attributed to lower orders from fleet sales, or taxi orders rather than consumer sentiment. Proton actually managed to increase its retail sales by 2.5% to 68,184 units from 66,513 units. From here, there was growth in Central, South and East Coast regions of Peninsular Malaysia as well as an increase from Sabah and Sarawak too. Proton recorded an increase of between 1% to 10% in the number of units sold in these areas.
As for fleet sales, taxi or rental cars in general, Proton suffered a drop. This translated to a loss of 2,807 units less than the total number of units sold in 2016. It is quite a sizable number in Ringgit in terms of overall revenue. I suppose it cannot be helped as last year and the end of 2016 actually marked a turning point in terms of taxi sales here in Malaysia. SPAD, or the Malaysian Public Transport Commission has liberalised the car rental market in some ways with the affirmation of ride sharing companies and the distribution of individual taxi permits (to the tune of about 2,000 permits or so per year) as well as the decision to only allow larger vehicles like Proton's Exora and the Toyota Innova to be taxis and ending the use of the Proton Saga as a hire car. It makes sense as the Saga is a good car for a small family, but a terrible taxi due to its small size.
Now as for the individual model sales, the Proton Saga, Persona and Ertiga make up 80% of total Proton car sales for 2017. Yes, it seems that while we do not see many Ertiga in the Klang Valley it seems to have attracted buyers from out of town. It sold 6,019 units in 2017. A little down on Proton's estimates, but the compact MPV does sell consistently. It should, as when I drove it to Kuala Selangor and back, it performed admirably well for budget MPV.
Proton's best-selling car for 2017 was the Proton Saga. A national icon in some ways, it registered steady sales of over 30,000 units in 2017. It is the most affordable compact sedan sold in Malaysia to date and to many, the Saga is still viewed as the most value-for-money car in terms of its price, segment and space it provides. It is still bought by hence, first time car-buyers or as a second car by many. The Proton Persona seems to be gaining popularity as it registered a 27% increase with 19,510 units sold compared to 15,390 units in 2016. It should, as the Persona performed extremely well during the outstation drive I had in it.
So why did the sales numbers of Proton stabilise? According to Abdul Rashid Musa, VP of Sales & Marketing of Proton, “Part of the reason that sales of our cars stabilised in 2017 is due to the aggressive quality improvement exercise done internally."
It all started with the push of the new car launches in 2016 of which the momentum continued into 2017. Most of the new cars at the time - the Perdana, Saga, Persona and Ertiga were launched in the third quarter of 2016 and basically Proton benefited from the freshness of the new cars (and the refreshed Iriz later in 2017)...which were actually nice to drive too. Quality was also up and it showed in the cars. The new models and the enhancements made were quite well thought out without any deal breakers putting it simply.
According to Abdul Rashid, the move by DRB-Hicom to allow management to be handled by Geely Auto is also key to the quality at Proton especially by the end of 2017. Geely Auto had performed quality audits of Proton's current line-up and within 3 months (most likely prior to November 2017 from what I can guess), Proton claims that they were able to improve their quality points threefold. The quality audit was measured using a system, which is aligned to the international standard of Volvo cars, as practiced by Geely.
So with Geely's input and management, Proton's production levels in terms of assembly and quality should be on the rise. The cars are already proven that they are durable and reliable, having gone through rigorous testing as well as their participation in several motorsport events throughout 2017. The most notable one was in the Sepang 1,000km endurance race last November 2017 where Proton won the Overall Champion title. Aside from that, they need to translate the win and reported improvements to actual sales now.
“We are looking at 2018 more positively and we hope to intensify our efforts to do better this year. This year will be a critical year for PROTON as we shall be implementing activities aligned to the new 3-10 years Business Plan, key to the turnaround of the Company. In order for us to pick up our sales numbers, we shall be taking further steps for more attractive consumer campaigns, and improvement of product and service quality,” Rashid added.
So this year we shall see Geely's new business plan for Proton take off. We shall firstly see the new Boyue SUV in right hand drive form by the end of this year. But the actual start of the business plan has already hit to ground rolling with 40 or so of Proton's vendors and another batch of Proton dealers sent to China to visit and discuss many business decisions. For the vendors, the word is that prices must drop by a fair bit (if not Geely can find parts elsewhere) and those that can do so will be given proper guidance. For the dealers, there are sales targets as well as showroom upgrade incentives to those chosen. The sales targets are quite necessary with the amount of dealers currently out there. This is usually the case in any company when new management takes over. Results must come or there will be some culling.
It is obvious. Proton is ultimately a business venture. Who would enter into a loss making venture? Such a thing does not make any sense. Now as for Proton, they seem to be on the right track with the new management team. 2018 could be more good news for them. As for 2017, I thought they would have actually sold a lot more cars than what they did. It isn't too bad considering the tough market with a lot of offers and rebates, but it could have been better. My silent expectation was the the company sold closer to their target of 100,000 units. Maybe about 85,000-90,000 at the very least.
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