The momentum started in 2020, in spite of the pandemic situation, and put Proton in a strong position to accelerate into 2021. With an appealing range of offerings, cumulative sales in the first quarter of the year (Q1) were the highest since March 2012, with a large number of orders as well.
This has created a knock-on effect and for Proton Commerce, the carmaker’s finance arm, it could lead to a record number of loan disbursements. It has seen its loan volume grow in line with the increase in sales of Proton vehicles. For comparison, in 2018, it disbursed a total of 5,410 loans and this nearly doubled to 10,668 the following year. For 2020, despite disruptions caused by the coronavirus as well as loan moratoriums to ease the burden on distressed borrowers, Proton Commerce disbursed 14,189 loans.
All-time high for loan disbursements
This year, after just three months, the company is heading towards a record-breaking volume – an all-time high of 20,000 loans disbursed. “Although there was a downturn in many economic sectors caused by the COVID-19 pandemic, consumer sentiment for car purchases remains positive. Proton’s gains in product quality, its additions to the dealer network and the launch of new models have grown interest in its cars and we are seeing the results in the number of loan applications received,” said Mooi Fi Phang, CEO of Proton Commerce.
“Our loan disbursement volume for Q1 this year has increased by 42.3% and we are confident of our volume growing even more in Q2. However, the hire-purchase market could face a tough second half of the year as the PENJANA sales tax incentive is scheduled to expire at the end of June so the industry could see a period of correction as market demand finds its natural level,” he added.
Younger buyers drawn to Proton brand
Mr. Mooi revealed that Proton Commerce is also seeing a change in the demographics of its customers. “The age of Proton buyers is trending downwards, indicating the company’s revamped line-up has made it a more trendy choice with younger Malaysians. He also said 80% of Proton Commerce’s customers opt for 9-year hire-purchase financing plans, and that impaired loan rates up to three times lower than the industry average,” he said.
“2020 was a tough year for the industry as financial institutions had to make modification loss provisions for the 6-month moratorium programme announced by Bank Negara Malaysia. Thankfully for Proton Commerce, the financial stability of our customer base meant a very low number of our borrowers opted for the subsequent moratorium and with the removal of the provisions this year, we expect to contribute a healthy profit to our shareholders,” he added.
