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Proton’s revival plan has been quite positive so far, with increased sales and the launch of new products like the X70 that have helped in that regard, and more to come. This revolution began when the national automaker formed a joint venture with Geely in June 2017, but the process to revitalize the brand is not as straightforward as some might think.
This was explained in an episode of Awani Agenda which aired recently, where Proton CEO Li Chunrong and Proton Deputy CEO Datuk Radzaif Mohamed spoke about the initiatives that were taken to bring the brand back to where it is today.
The interview begins by discussing the relevance of joint ventures in the auto industry, and Li shared his experience with other companies previously. “In China, in 1957, China started making commercial vehicles. Around 1997, Geely began manufacturing passenger cars. So Chinese automakers were too late. However, after China entered the WTO, all the original equipment manufacturers and international players came to China, so the competition is very serious and the market is also bigger, ”he said.
“Due to these two reasons, Chinese automakers improved a lot. Not only for commercial vehicles, but also for passenger vehicles, we learn a lot from joint ventures and China can develop [its own] passenger cars, ”he continued.
Li also explained the knock-on effects of the collaborations, saying, “In the beginning, in terms of passenger cars, because of the joint ventures, the Chinese OEMs produced components for the joint ventures. For these providers, they learned a lot. At the same time, Chinese automakers can ask international designers about things like style, not just technology but also design. Chinese OEMs learned from other OEMs [that way]. “
The interview then touched on the impact Geely and Li have brought to Proton after three years, and why their arrival was necessary for the company, according to Radzaif. “I take you back to the years when Proton was first established. I think the main reason Proton was supposed to lead the industrialization of Malaysia through the automotive industry was to develop the competence of the Malaysian people and at the same time to be able to trade internationally, ”he said.
“As we move into 2015/2016, we recognize the fact that we couldn’t do it alone. And for me, having Geely as our strategic partner is realizing that this is something we must do to remain a competitive brand and take our automotive industry to the next level in Malaysia. It wasn’t something we didn’t realize. We already know that to move forward, we needed to have new technology, which we could not find in Malaysia on our own, ”he added.
From there, the conversation led to the new way Proton develops its products, with the X70 representing a significant leap from previous offerings. Radzaif said this was necessary for the automaker to keep up with market trends and needs. “Where we lacked in the past, that’s why we fell behind. We did not meet the requirements, we did not focus on the quality requirements of the market, what consumers want and certain things that were ‘famous with Proton’ ”.
“But this is the kind of thing the market wants, and consumers are getting more sophisticated, and if they can find it with other brands or brands, then they will move to that brand,” Radzaif said. Citing the X70, he said it was “a jump from where Proton was, and this is one of the reasons we said we need to look for a foreign partner,” he added.
On the set targets, Li reiterated his ambition to want Proton to be the number one auto company in Malaysia and the number three in ASEAN by 2027, but believes that technology and products are not the only drivers to achieve these goals. “We should not depend on technology. Behind the technology, behind the product, are the people. Behind the people is culture. We spent three years improving our product, improving our people and improving our culture, ”he said.
Since the signing of the joint venture, Proton has worked hard to renew its network of suppliers and distributors to instill confidence in customers who purchase its products. However, improving these support elements has not been easy.
“When I visit our distributors, I found that about 70% of our distributors only focus on sales, they forget about after-sales. Why? Actually, aftermarket profitability is high, but they don’t want to do it and that means there is no trust in our brand, ”Li said.
“When we plan to launch the X70, we know that it is a very good product. We want our clients to have a good experience. That is why we asked our dealers to set up 3S or 4S, then our customers can have good service and at that time 95% of dealers did not agree. Two years later, about 90%, they like it because they can earn money, “he added.
Radzaif also weighed in on the matter, saying, “Where I come from, before Li, I think everyone realized the difficulty Proton faced and this was our chance to turn around. Rightly so, as Li said, the key to this is making sure the customer is satisfied with what we are trying to sell. Of course, the products we make and sell represent the mass market, but more important than that, we make sure that when we sell, the cars have no problems. “
“When there are problems with the car, we can recover and take the appropriate measures quickly. That was not the case in the past, but Li and we somehow had to talk to distributors, we had to do the same with our suppliers as well. Each of the stakeholders within Proton represents the Proton brand, and if any of them failed to deliver what we expected, the brand suffers, “he further explained.
Focusing on the company’s sales performance, Li was asked if he was concerned about hitting the sales target set for 2020 amid the current Covid-19 pandemic. “At the end of August, in terms of accumulated figures, we are positive. So, we believe that this year we can achieve a good performance in terms of records. But for profit, we may have a problem because we stopped production for two months and also we did not cut the salary of our staff, “he replied.
The imminent arrival of Proton’s next SUV, which many know as the X50, is something Li believes will contribute to the company’s sales volume, but he didn’t reveal too much about the compact SUV, which is slated to be anticipated today. “For X70, it’s Level 1 in terms of autonomous driving. This car is level 2. I think it is the most advanced in Malaysia to date, ”he said.
“I think you can see the excitement in the market, right? People are talking about the new model and of course we are also excited to feel that this model will help us take our performance to the next level, ”added Radzaif.
Radzaif was also asked what guarantee Proton can provide to Malaysians in the future, beyond improving business performance, to which he replied: “I think this new purpose that we have, in the sense that we believe we can improve than we used to be, as long as we focus on the right areas. “
“For example, technology, consistency in terms of quality and, of course, very important, listening to what the market wants and changing according to market trends. I think if we can deliver those three things, we are on our way to making sure that Proton is something relevant in the future and a brand that Malaysians can be proud of, ”he continued.
Focusing on Proton’s 10-year plan through 2027, Li repeated the company’s goals and the requirements necessary to achieve them. “I believe that before 2027, Proton will be number one in Malaysia and it will also be number three in the ASEAN market. This is a key KPI, ”he said.
“I mean if we want to be number one, our sales must be number one, our product must be number one, our people must be number one, our corporate culture must be number one. So this is what we want to achieve. We are not just businessmen, we want to improve our Proton people, our staff, ”added Li.
He also touched on future Proton models that will be built from scratch when asked, “I want to tell you that we are now discussing that [launch new models] developed by the people of Proton, by ourselves. We will develop not just one model, but two models together. Definitely in five years. “
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