We have just come out of the Movement Control Order (MCO) due to the Malaysian government trying to curb the spread of the COVID-19 coronavirus and are now hopefully into the tailend of the Conditional Movement Control Order (CMCO). The shutdown of the country's businesses due to this has led to a near total economic slowdown and now, the automotive industry like other sectors are moving slowly, hoping for recovery of sorts. Malaysian car company PROTON has posted its May 2020 sales figures and they have sold a promising 5,676 units of vehicles.
5,676 vehicles equals to an estimated market share of 23.3%. According to PROTON, the same month in 2019, the Company sold 10,611 units marking a difference of 46.5% and a clear reflection of the challenging market conditions arising from the COVID-19 pandemic. Of course, still quite a good number considering not many people could have gone out and purchased a car due to the MCO and CMCO.
However do note that the chaps and PROTON are indeed feeling the pinch. You see, post Chinese New Year 2020, their sales had slumped compared to March 2020. Usually the post festive season hits car companies hard as those that bought their cars have done so and those that don't, well, have less money after celebrating the holidays.
The 5,676 units in May 2020 was an improvement of 73.2% compared to March 2020. So despite the need to comply with the standard operating procedures of the CMCO sales were subjectively good for them.
However, in terms of Year-To-Date (YTD) sales, the company's volume reduced by 23.3% for the first five months of the year while Total-Industry-Volume (TIV) is estimated to have shrunk by 48.7% over the same time period. But terms of market positioning and market share, PROTON remains as the second most popular car brand in Malaysia with a YTD market share of 21.1%, which is in-line with targets set for the year.
I think the reason for the sales dip is that 2019 was a bumper year for PROTON which that launch of their X70 SUV and the revitalised legacy cars like the Saga, Persona, Iriz and Exora. Since many bought during the hot launch period, it was bound to taper off slightly. This year, the coronavirus hit hard and as most of you would know, affected everyone everywhere.
But so far, their models continue to lead market segments. The company's performance in May was the direct result of four models being the best-sellers in their respective market segments. The Proton X70 retains its position as the best-selling C-segment SUV in the country, and cumulatively for 2020, it is also the best-selling SUV overall. The performance is due to better brand perception these days, the overall equipment levels of the models and the price factor. Price is an important factor in unfavourable economic situations like this and people tend to look at affordability coupled with value of money in the product. So Proton cars are now looked at due to its price.
“The MCO and CMCO were an unprecedented event in Malaysia’s history and affected every aspect of the national economy. The automotive industry is now moving towards recovery but as expected, the first month has been a period of adjustment as we adapt to the ‘new normal’ regarding all aspects of our operations. PROTON is thankful our sales have not contracted as much as expected and we also need to say thank you to our vendors who worked tirelessly to ensure we could regain our footing as quickly as possible. It will take a few more months to get an accurate reading of market conditions but we are quietly confident from this point onwards, we will see steady growth for the rest of the year,” said Dr Li Chunrong, Chief Executive Officer.
One thing about the MCO and lockdown imposed globally, it actually has affected not only buying power but also manufacturing. While one may only see that manufacturers may be producing more products than is needed, it may not be the case as even production is affected by the lack of parts worldwide. Vehicles are assembled from a variety of parts coming from everywhere. With cars from PROTON, it features parts made everywhere including China (note the X70 is a Geely Boyue) and the supply chain is affected as factories stopped production everywhere.
So at least in terms of stock overheads, the slowdown may have helped PROTON as when demand slumped, their production line has now crawled due to factors beyond their control too. There is somewhat of a balance of sorts.
Anyway, other PROTON updates include the Proton X70 SUV now comes with a N95 cabin filter, the Proton SAGA is actually the best selling car in the month of May 2020 and June 2020 offers from pandemic frontliners are still ongoing as well as an offer for the Proton X70.
Assembled on a new production line in Tanjung Malim it received a product update in May, an N95 cabin filter, as part of its Proton-Intelligent Air Purifier System (P-IAPS). The new part is also offered to current Proton X70 owners as a replacement for their dust and pollen filter.
There was more success for PROTON when the venerable Proton Saga achieved the accolade of best-selling car in Malaysia for May 2020. It is the first time the updated 2019 model has managed the feat and also means it was the most popular A-segment sedan in the country last month. Other Proton models also performed very well with the Proton Persona being the best-seller in the B-segment sedan category while the Proton Exora remained in its customary position at the top of the C-segment MPV market.
Attractive offers and continued support for frontliners in June
For the month of June, PROTON will continue to offer better value to entice car buyers. Purchasers of the Proton X70 will be eligible for 0% financing for the first year, subject to a set of terms and conditions.
Beginning 10 June, the Company will also be introducing a reward programme for Malaysian frontliners, specifically nurses, doctors, members of the police and army as well as Ministry of Health (MoH) and Ministry of Home Affairs (MoHA) staff. Called the Credit Shield Protection Programme, it offers eligible buyers of any Proton model free personal insurance coverage of up to RM50,000 for five years covering death, accidental death and permanent disability.
“The sacrifices of Malaysia’s COVID-19 frontliners can never be adequately compensated but we hope our gesture will help demonstrate our gratitude for the work they did. As for the financing package for the Proton X70, it will help to make Malaysia’s only premium SUV more affordable for more Malaysians and is now an even better ownership proposition thanks to the introduction of the N95 cabin filter,” added Dr Li Chunrong.
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