After a short period of inactivity for PROTON in exporting cars, the Malaysian automotive manufacturer is now back in action for the second half of 2018. Recently, PROTON resumed exporting cars to the Middle East, marking the first time the Company has done so since formalizing its partnership with Geely. A symbolic flag-off ceremony was held at Westports Malaysia’s berthing area to commemorate the occasion, with Proton cars lined up to be driven on board the Grand Diamond cargo vessel.
Demand remains strong for Proton products…
The port of arrival in the Middle East is Aqaba in Jordan and from there, the cars will be distributed to Iraq and other neighboring countries. The first shipment will consist of 453 Proton cars, which have a strong following in Middle Eastern markets. The enthusiasm for the cars is such that there are even active owners clubs in the region despite the slow-down in exports over the past few years.
“This ceremony marks a starting point for PROTON as we resume and ramp up shipments to the Middle East in the coming months. It’s also the first export shipment since the partnership with Geely commenced and we expect our export market to have a positive outlook in the future so be prepared for more such announcements from as early as August this year,” said Dato’ Radzaif Mohamed, Deputy Chief Executive Officer of PROTON.
Voicing the same sentiment Eddie Lee, Chief Executive Officer of Westports, said, “We are equally excited to partner PROTON in its efforts to export cars all over the world, particularly as its last major export to Egypt was back in 2015. We believe Westports’ partnership with our customers like PROTON together with shipping agents like Sunship will further strengthen both brands, and help ensure cars sent over are in pristine condition.”
PROTON quality improvement efforts bear results…
Dato’ Radzaif’s enthusiasm for PROTON to grow its export market are backed by improvements to its product quality. Ever since the Company implemented the Global Customer Product Audit (GCPA) system on its production processes, the number of demerit points registered has seen a threefold improvement. Based on a sliding scale where smaller scores equates to better quality, the current GCPA score for PROTON as at the end of June 2018 is 1763 demerit points, with a year-end target of 1500. This compares favorably with Geely and Volvo who also use GCPA and have current scores of 1200 and 850 points.
“PROTON has always strived to produce high-quality products for our domestic and export markets but the collaboration with Geely has introduced a new quality mindset along with a shared quality audit system that is also used by Volvo. Using it as a roadmap we have managed to lower our demerit points threefold as we aim to deliver ever better cars to our customers,” he added.
Expanding export activities with assistance from Geely…
Also present at the ceremony was Dr Li Chunrong, Chief Executive Officer of PROTON. “The Middle East markets hold high regard for products from Islamic countries like Malaysia. The demand for cars will grow as their economies develop and will help fuel the growth of our export business. The ASEAN market however will remain as the main priority for PROTON’s export business so we are excited about the opportunities available in the region.” he said.
PROTON is also leveraging on Geely’s extensive overseas network operations to increase the cost effectiveness of its own operations. “We are exploring all opportunities to grow export volumes for PROTON. Geely are making a big effort to support us in this initiatives and there is a lot of experience within the group so we hope to leverage on it to enable us to sell more cars outside of Malaysia,” added Dr. Li.
Meanwhile in other news from the sales side, PROTON marked the end of the first half of 2018 by posting strong sales numbers for the month of June. Sales grew by 50% over the previous month as 6,173 Proton cars were sold to Malaysians eager to take advantage of zero rating for GST and the Duit Raya promotion offered by the Company.
Approximately 10% market share with Saga and Persona leading sales…
In line with the increase in sales, total market share also increased with PROTON garnering approximately a 10% share of Total Industry Volume (TIV) for the month compared to 9.5% previously.
As with previous months, the Saga and Persona continue to lead sales, with the former registering nearly 3,000 units sold. Buyers were attracted to the strengths of PROTON’s compact family sedan with its class leading affordability, spaciousness and handling as well as the ‘Best Saga deal in 10-years’ promotion offered in June where a brand new Saga could be bought for less than RM30,000. Improved product quality for all Proton cars was also a contributing factor as the implementation of the Global Customer Product Audit (GCPA) system has seen a big reduction in production line demerit points for all cars.
“PROTON had its best sales month for 2018 in June, proving that Malaysians continue to find the current range of Proton cars attractive thanks to the range of features that have been engineered into each model. The attractive promotional offers we had, zero-rated GST price and an overall improvement in the quality of our cars helped to boost sales, which we are hopeful of carrying over for the remainder of 2018,” said Abdul Rashid Musa, Chief Executive Officer of PROTON Edar.
Improving quality scores…
After obtaining a J.D. Power Customer Service Index (CSI) score of 755 points in 2017, PROTON embarked on a quality improvement initiative to perform better in 2018. The CSI score is measured by examining dealership performance in five areas (in order of importance): service quality (32%); service initiation (22%); vehicle pick-up (18%); service advisor (15%); and service facility (13%) and to improve its score, PROTON has initiated activities to boost scores in each area.
Initial scores using PROTON’s own stringent internal audit system are already showing an improvement in CSI scores. Via the GCPA system implementation, the quality of the Proton cars has improved 3 times in the past 8 months, measured by the VOLVO quality standards. Combined, both activities the CSI initiatives and the product audit exercise, these will see an improvement in the overall experience customers have with the brand.
Supporting Tabung Harapan Malaysia As announced previously, PROTON is contributing RM10 for each car sold from 1 June to 31 December 2018. Therefore, following the first month of the programme, a sum of RM61,730 has been appropriated for Tabung Harapan Malaysia. With sales on an upswing and the launch of their first SUV due to happen before the end of the year the Company is optimistic about the amount of funds growing much larger.
“PROTON is proud that we have managed to earmark over RM61,000 for Tabung Harapan Malaysia in just the first month of our contribution initiative. It is our intention to sell even more cars for the rest of the year so as to contribute as much as possible to the fund that will eventually benefit all Malaysians,” explained Rashid.
New SUV receives boost from Tun Dr Mahathir…
While the launch of PROTON’s first SUV is still some months away, the pre-publicity build up for the first product jointly developed with Geely recently received a boost. The 7th Prime Minister of Malaysia, Tun Dr Mahathir Mohamad, recently met with the Chairman of Zhejiang Geely Holding Group, Li Shufu, and following their discussions the premier got behind the wheel of the first right hand drive (RHD) pre-production unit of the SUV.
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An avid driver, Tun spent the ensuing weekend putting the test car through its paces and told the media the following week that it was very good and he was impressed by its quality. He also commented that the SUV would be a good product for the Malaysian automotive market and added that he wanted more Malaysian companies involved in the supply of automotive components. Having gained the stamp of approval from the Prime Minister, PROTON is intensifying its publicity efforts for the SUV in the lead up to its launch later in the year.
“We are happy that the Prime Minister of Malaysia, Tun Dr Mahathir Mohamad, approves of our efforts with Geely. This confirms that PROTON are on the right track and now that pre-production of the SUV has commenced we will soon begin our media and customer previews to build momentum ahead of the actual launch,” said Rashid.
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