PROTON continues its current business expansion trajectory, the national automotive brand has started diversifying its operations and revenue stream by exploring different angles within the automotive ecosystem and more. This new push for other business sources comes with the creation of Proton Global Services (PGS), a wholly owned subsidiary of Proton Edar, which is now a key contributor to PROTON’s business network.
PGS was formed in 2021 with just one F&B and merchandise outlet (at the PROTON Centre of Excellence in Shah Alam), PGS has expanded its scope of operations to now encompass six key areas, namely Lifestyle, Engineering, Training, New Energy, Logistics, and R3 Motorsports. PGS, under its CEO, Lee Yeet Chuan, stated that revenues have increased from below RM1 million in 2021 to about RM19 million by at the end of 2023. The most noticeable areas of business are the Lifestyle (the food and beverage)) and R3 Motorsports divisions.
The Lifestyle division has been tasked with managing the Proton Café and selling Proton merchandise while the latter is focused on developing performance variants and running Proton’s racing activities. Launched in 2021, the Proton Café offers customers freshly brewed premium coffee and food items in a relaxed setting. To date, 16 outlets are operating at Proton dealers with plans to expand the business footprint to 25 outlets by 2025.
As for merchandising, Proton branded merchandise have long been available, but there was a lack of push making it more available and on a commercial level at all times. This has now started under PGS. and taking into account the demand for Proton and R3 branded items, there are currently 20 Proton merchandise partners nationwide as well as a virtual shop at protonmerchandise.com for online sales.
But they are mow pushing their R3 branding. This is most likely its most recognisable business division where racing and motorsports of the Proton brand are strongest. R3 Motorsports celebrated its 20th anniversary in 2023 with the launch of the Proton X50 R3 20th Anniversary Edition. This year they are focusing on developing a Proton S70 R3 racing car with the aim of participating in the S1K (Merdeka endurance) race, and growing sales for their high performance R3 lubricants.
“The retail business for PGS leverages on the strong enthusiasm Malaysians have for Proton. With so much history behind the company, we have an opportunity to build closer ties with Proton owners while offering them premium products and services. Our activities also indirectly reinforce Proton’s branding, and this is clearly seen via our R3 branded merchandise, lubricants and return to motorsports in the future,” said Lee Yeet Chuan.
Aside from the push into lifestyle and motorsports merchandising, PGS is leveraging on ecosystem opportunities. PGS seems to work like PROTON's special projects division in that it can identify and then also undertake projects within PROTON’s ecosystem. Doing so allows the parent company to receive additional revenue as profits are shared with Proton Edar. Examples of such projects include changing the lighting at PROTON’s casting plant to more efficient energy saving units and supplying the furniture as well as commissioning new office space for department transfers to Proton Tanjong Malim.
The New Energy division meanwhile is focused on the introduction of renewable energy to aid the company’s ESG rating while also retailing energy efficient solutions. Initiatives undertaken include the sale and installation of solar PV cells to Proton dealers and vendors as well as collaborating with partners to build a proof on concept for mobile EV charging. While it looks like one PROTON company to another, you could also say that this is a means for PROTON to standardise the solutions and source the items used at all dealerships themselves, and it does mean that there is also economics of scale when purchasing items required to upgrade these buildings.
“PROTON has been able to derive a number of benefits by forming Proton Global Services. From a costing point of view, the company is now able to better control operational costs while PGS retail operations allows us to leverage on the strength of our dealer network and brand image and maximise revenue opportunities from sales of merchandise, F&B and high-performance lubricants.
“For the future, plans are in place to expand the use of renewable clean energy for PROTON and our vendors while work is currently ongoing between PGS and its engineering partners to develop energy storage and charging solutions critical for future Proton models. Added to initiatives to support training for automotive industry workers as well as a growing logistics presence, we envision PGS to continue to make consistent contributions to PROTON’s bottom line in the future,” said Roslan Abdullah, Chief Executive Officer, PROTON Edar.
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