Geely eyes region with Proton brand

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After Geely invested in Proton, the Malaysian car marque launched six new models in eight months, including the X70 SUV.PHOTS: REUTERS

It revives car marque in Malaysia in two years, now aims to expand

KUALA LUMPUR • Mr Li Chunrong was hired by Chinese carmaker Geely to revive the fortunes of the Proton brand in Malaysia, and it took him two years to eclipse Japanese giants Honda and Toyota. Now he plans to take the fight across South-east Asia and beyond.

Mr Li, appointed Proton chief executive in 2017 when Geely acquired 49.9 per cent of the company, has turned around a once-celebrated Malaysian marque that had to rely on state aid after a string of losses, with his success built on an aggressive cost-cutting drive.
Geely has told the Proton boss to expand across the region, initially focusing on Thailand, Indonesia, Singapore and Brunei, Mr Li told Reuters – the first time concrete details of the brand’s expansion plans have been disclosed.

Like Malaysia, they are right-hand-drive markets, so they require fewer car modifications.
Proton also aims to drive into the Middle East and increase sales to Egypt, said the 56-year-old Chinese national.

Mr Li said Proton wanted to raise overseas sales – which stood at about 1,000 cars last year, or 1 per cent of total sales – at least fourfold this year.

The brand wants 40 per cent of its sales to come from foreign markets by 2027, he told Reuters in two interviews, identifying Thailand and Indonesia as the key markets, but declining to outline his strategy to crack them.
“We have a good foundation,” he said. “We commit that, every year, we will launch a new model.”

The Asean region of more than 500 million people is promising territory; car sales are forecast by consultancy IHS Markit to grow at a compound annual rate of 3 per cent in the period from 2016 to this year, compared with a 1 per cent drop globally.

But IHS said Proton was still a small player compared with the Japanese brands, and it could struggle to compete. Asean sales are led by Toyota with a 30 per cent market share, Honda with 13 per cent and Mitsubishi with 10 per cent, according to the consultancy.
Proton is in 11th place with about 3 per cent, mainly from Malaysia.

Proton’s goals are ambitious, and it may not have the production capacity to make inroads regionally, said Ms Mayuree Chaiyuthanaporn, a senior IHS analyst.
Proton, majority-owned by Malaysian conglomerate DRB-Hicom, has launched products at breakneck speed in its home market. It dropped many old models the first year of the joint venture, then launched six new ones within eight months, including the X70 sport utility vehicle, based on Geely’s Boyue.

Proton became the second-largest car seller with a 16.7 per cent share last year – when it made its first profit in about nine years – climbing above Honda and Toyota from fourth position.

Mr Li said Proton could beat Malaysia’s top seller Perodua, backed by Japan’s Daihatsu, by 2022 – five years ahead of the target announced after Geely’s investment.

Proton has increasingly switched to sourcing cheaper components from China, and let go of many small Malaysian local distributors, stoking some resentment.

The turnaround under Mr Li has forced Prime Minister Mahathir Mohamad, a car aficionado, to reverse his initial opposition to Geely’s investment in Proton.

“Now, it’s selling 100,000 cars and it’s making profit,” Tun Dr Mahathir, whose fleet of cars now includes a red X70, told reporters this month. “Why? Because of management, because of good technology.”
REUTERS

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