MARKET SUMMARY Proton is the Malaysian national automobile manufacturer (Malay acronym for Perusahaan OTOmobil Nasional, 'National

Automobile Enterprise'), which was established in 1983 under the direction of the former Prime Minister, Dr. Mahathir Mohamad. Proton Holdings Berhad, the holding company, is listed on the Bursa Malaysia. Based on technology and parts from Mitsubishi Motors, production of the first model, the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained. The 100,000th Proton Saga was produced in January 1989. Until the end of the 1990s, the car's logo featured the crest from Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new Proton logo features a stylized tiger head. In 1993, a model called Proton Wira was introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold between 1996 and 1998. Proton Perdana, based on the Mitsubishi Galant/Eterna, was first produced in 1995, intended for higher end market. The Proton Waja (Proton Impian in UK), which launched early 2001, is the first car model designed internally by Proton. By 2002 Proton held a market share of over 60% in Malaysia, which was reduced to barely 30% by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import tariffs to a maximum of 5%. (See "Trivia" section for update on tariff implementation) With the acquisition of Lotus technologies in 1996 from ACBN Holdings (a company owned by the owner of Bugatti), Proton has gained an additional source of engineering and automotive expertise. This led to the production of Proton Gen-2 which was code name Wira Replacement Model (WRM) before the launch. The Gen-2 is the first of cars to be manufactured and assembled at the new manufacturing plant in Tanjung Malim, Perak which is part of Proton City development project. The plant was opened in 2004.

On 8 June 2005 Proton introduced the second model to be manufactured in Tanjung Malim, the 1,200 cc 5-door supermini, the Proton Savvy. Both the Gen-2 and Savvy, were models that MG Rover was looking to rebadged when the British firm entered into collaboration talks with Proton. However these joint-venture talks were unsuccessful and MG Rover subsequently collapsed. In 2007, Proton launch its new sedan as replacement version for Wira Sedan but with new name, Persona. The new Proton Saga replacement model (codename Proton BLM) was launched on 18 January 2008. The new Saga is based on the Savvy platform, but using Campro 1.3L instead of Renault engine. It was announced on August 8, 2008 that Proton is developing a new, fuel-efficient hybrid car to beat rising costs and address environmental concerns. Prime Minister Abdullah Ahmad Badawi told reporters that he had already test-driven the car and urged the company to continue researching energy-saving technologies. As of 3 August 2008, Proton has produced 3 million cars since 1985, where the 3 millionth cars is a second-generation Saga. TARGET MARKET Proton has exports cars to the United Kingdom, South Africa, and Australia and the company is aggressively marketing its cars in several other countries including the Middle East. Besides that, Proton cars has also been exporting a small volume of cars to Singapore, Brunei, Indonesia, Nepal, Sri Lanka, Pakistan, Bangladesh, Taiwan , Cyprus and Mauritius. 14,706 Proton cars were exported in 2006. Recently Proton returned to Guangdong, China, where it did business in the past but withdrew after having poor sales record. In July 2007, Proton signed an agreement with Youngman Automobile Group Ltd. Co., paving the way for the national carmaker to offer its products and services in China. Under the agreements,Youngman will import 30,000 Gen.2 CBU (completely built-up) units and resell them under its own EuropeStar brand and eventually develop a new range of Made-in-China cars with the engineering services provided through Proton's Lotus. Proton

is expected to ship 1500 cars a month for 20 months starting December 2007 to fulfill the order. Proton began its exports from Malaysia to other right hand drive markets like New Zealand in the late 1980s to fulfill consumers needs based on culture situation, but its success was mostly limited to the United Kingdom where it entered the market, along with Ireland, in 1989. They advertised there with the slogan Japanese Technology, Malaysian Style. Proton cars proved popular among budget-oriented motorists, and like Japanese and South Korean models before them, led to the demise of manufacturers such as the Soviet Lada and ex-Yugoslavian (now Serbia) Zastava. By the 1990s, Proton had withdrawn from the New Zealand market after offering only the Saga four-door and Persona five-door models. The company also exited the Irish market in the early 1990s, following limited success in that country. The Persona and Natura models were sold in Chile briefly during the late nineties by a local Nissan importer, but few were sold and the venture ended after two years. Proton sales seem to be slowly declining in the United Kingdom with 2008 sales at 1518 (0.07% share of the market), compared to 2752 in 2002. These figures are insignificant compared to 2008 UK sales of 28,036 for Korea's Hyundai and 29,397 for Spain's SEAT. Proton also exports cars to Singapore and Australia, and now produces models in left-hand drive, for export to continental Europe. An entry into the US market was considered by Malcolm Bricklin following Hyundai's successful launch in the mid 1980s. However, exports to the US never materialized, as the cars required hundreds of changes to meet American safety standards in order to secure coverage from auto insurers and satisfy legislative requirements. Proton export models still do not comply to all environmental standards such as emission limits. The model that Malaysia has followed with the formation of Proton may be used as a case study for rent seeking as tariffs on imported cars rose almost immediately following the formation of Proton. Also AFTA agreements on relaxing entries into the ASEAN market space had exemptions specifically for Proton. The Malaysian government gained a

In the period ending December 31. The bankruptcy of the dealership forced the exit of Proton from Trinidad and Tobago in 2002. 2006.6% market share. H.4% from 166. with a later report indicating a 55% fall of sales to 962. However.538 for the Malaysian market.3 million ringgit.5 million ringgit in 2006. with a 41. Proton blamed discounts from rivals. This allowed Perodua to overtake Proton as the country's largest passenger carmaker for the first time. In the United Kingdom.118 in 2005 to 115. They are considered deeply unfashionable with younger drivers. made it easy picking for a potential thief. MARKET GROWTH Proton market growth have been drop in 2006.three-year exemption for Proton from 2002 to 2005 where entry tariffs had to be lowered to 5%. Proton cars suffer somewhat from a poor public image. Only the Saga and Wira ever reached this market with the Wira enjoying modest sales success. Proton's sales dropped 30. In 1998 Proton attempted to change this by introducing the Proton Satria GTi however.E Robinson Ltd. The Satria GTi also sported a "Lotus Ride & Handling" badge which. Compared to a profit of 86. They were sold through a local dealer.5 million ringgit in 2005. the vehicle was a success as far as handling was concerned which meant that. coupled with an average security system. the car was somewhat out of reach to younger drivers due to high insurance premiums. This was replaced by other duties resulting in no net decrease in automotive prices for importers. while Proton's market share fell from 40% in 2005 to 32% in 2006. Proton has also suffered three consecutive quarterly losses. The Employees Provident Fund (EPF) acquired an . they are identified as being a vehicle popular with elderly people. Total losses in 2007s financial year climbed to $169 million. Proton cars were imported into Trinidad and Tobago between 1993 and 2002. the car company lost 281. coupled with its 1.8 16-valve Double Overhead Cam Engine (which produced 133bhp) a number were purchased by Octogon Race Circuits and used as track cars at Silverstone and Brands Hatch racing circuits. its lowest in at least seven years.

The PERSONA and SAGA are planned to be launched in PROTON’s major export markets from June 2008 onwards. PROTON expects to significantly improve its exports performance further. PROTON spent over RM500 million on R&D projects and activities. was mainly due to the introduction of PROTON’s two new models. For the current financial year ending 31 March 2009. The increased revenue generated from increased sales volume.additional 830. In 2008 improved performance was achieved on the back of increased revenues to RM5. . PROTON is committed to further enhance its R&D and product development activities with a view to further invest in projects that meet the requirements of the market and allow for quick commercialization. 2007. in-line with this philosophy.6 billion compared with RM4. The group has also benefited from its revenue diversification program with income from sale of rights for use of its intellectual property. in its export markets. given the new product range.9 billion in the previous year.000 shares in a transaction that spanned between January 5 and January 12. In the last financial year alone. As such. PROTON understands the importance of introducing new products and models that meet the expectations of the market. This is clearly demonstrated by the good reception to the PERSONA and SAGA. the PERSONA and the SAGA.

particularly Chinese manufacturers such as Geely Car ownership levels are relatively high at one car for every four people.SWOT ANALYSIS Strengths Ties with other ASEAN markets are strengthening all the time through AFTA induced tariff reductions. Weaknesses The national industry is in decline. which were then passed on to the customers through competitive pricing. with Proton losing market leadership for the first time in 2006 (albeit to fellow national producer Perodua). Proton has also made commendable progress to bring about other operational improvements. It will adopt a three-pronged thrust namely development of market-driven products. the existing quality issue can affecting brand image caused by active service . Protectionist measures are still barring new entrants. Proton will continue to strengthen itself in all aspects to operational. focus on high growth regional markets and a production strategy that achieves economies of scale. which will provide advantages for carmakers basing themselves in Malaysia. Emphasis on the elevation of the automotive eco-system saw the strengthening of the vendor base and dealer network. financial and corporate to better equip itself in the years ahead. The focus on cost management resulted in cost savings for new models. These rationalization initiatives enabled Proton together with vendors and dealers to deliver improved quality of service and be more competitive. In addition to successes in product portfolio. compared with one for every 30 in neighboring Thailand and Indonesia After that. with General Motors (GM) forming a tie-up with DRB-HICOM in August 2007. The market continues to attract investment from major carmakers.

According to Proton Managing Director Syed Zainal Abidin Syed Mohamed Tahir. Proton also plans to sell 30.units such as political interference by Tun Porsche on vendor selection. no economies of scale. inability to satisfy customers' needs. Phranakorn Auto Sales will initially sell Proton models in 20 dealerships. Funds shrinkage can influence result in Proton inability to introduce new models. Elsewhere in Asia. although this will change to completely knocked down (CKD) kits for assembly from mid-2008. The company is evaluating a plan to build a production plant in Egypt. inability to penetrate export markets. which would act as a gateway to Africa and West Asia and boost the carmaker’s exports. Malaysia’s Proton has set its sights overseas. Talks with Indian distributors are underway but no concrete arrangements have been made. Proton’s export plans could help to offset its declining domestic influence and improve its global performance. Proton already sells its Gen. Plant utilization low can also inability to retain and cultivate talent. Egypt provides a large market but could also act as a base to countries such as Saudi Arabia and Sudan. Proton will initially export completely built units (CBUs) to China. inability to introduce real new models. corporate governance and complete numbness of developments in the auto industry. .000 units in China by end-2008. 2 and Savvy models in African markets. confirming that a market for the company’s models already exists. Proton has also appointed a Thai distributor. Opportunities The entry of Danish vehicle tuner Kleeman could provide a boost for the premium vehicle segment. appointment of top management and design. Starting in November 2007. no sense urgency. such as Egypt and South Africa. with the network due to double within four years. which was appointed in July. The models will be sold under the Europestar brand by distributor Youngman Automobile Group. Faced with declining domestic sales and uncertainty regarding a strategic partnership.

falling behind Perodua. After that. with the double-edged sword of long-standing government protection militating against efficiency. production fell from 563.000 units. According to Mahaleel Ariff.048 units in 2006. Malaysia’s output capacity has now reached 700.000 units could result in a supply glut Thailand’s ‘Detroit of Asia’ strategy threatens other manufacturing bases in the region. the company lost leadership of the market for the first time. with the two firms’ combined market share declining. chief executive of stateowned Proton. Proton has been particularly hard hit. making it have a market share of 44% (13.574 units) as opposed to proton’s 30. The competitive position of state-owned carmakers Proton and Perodua has remained a key focus for the Malaysian automobile industry in recent years. The Myvi has proven to be a stunning success. In February. Proton and Perodua has been at each other’s heels since December 2006 when Perodua outsold Proton in monthly sales by 99 cars. For every Proton Savvy sold by Proton. However. This time however.408 units in 2005 to 503. Perodua sold Perodua Myvi. Other than. of which his company and fellow national Perodua account for 500.284 units. the Malaysian Automotive Association reports that Perodua’s monthly sales have topped Proton by a massive 4. A bloated workforce and a lack of new models have not helped the firm.Threats Malaysia’s trade dispute with Thailand over non-trade barriers in the automotive industry could hamper the export projects of major carmakers Burgeoning capacity levels of around 700. In 2006.000 units.290 units.35% is 9. Perodua’s lead was short lived when Proton outsold Perodua the following month by 550 cars. Perodua outsold Proton again. COMPETITOR ANALYSIS Malaysia has become a hotbed of production activity in recent years thanks to a raft of new assembly licences granted to international manufacturers. beating Proton monthly sales figures by 763 units. leadership of the passenger market shifted for the first time ever from .

Shenyang Brilliance Automotive Company Ltd. Despite increasing numbers of carmakers launching production activities in Malaysia. Finally that.. boosting its market share from 32% in 2005. to 115.4%.5%. In terms of total sales for all segments.. Hyundai Motor Company Ltd. as well as an emphasis on small. The competitive environment category measures the opportunity for new market entrants. Isuzu Motors Ltd. Another that. Mazda Motor Corporation. claiming 32% of the market from sales of 155.706 units. Perodua again made its mark. Perodua.. to 152. fuel-efficient vehicles. more expensive Proton offerings. while Proton trailed with 24% from sales of 115.A. increased its sales by 14%. its subcompacts do not directly compete with larger. competitor is Toyota Motor Corporation. Toyota’s share of the total market is double that of its passenger car share with 16. The company has 140 sales outlets and 37 service branches and 113 service outlets across Malaysia.. Kia Motors Corporation and Toyota Astra Motor PT.419 units.733 units. to 42%. The market scores 5 out of 10. against the Japanese brand’s 5.538 units or 32% of the market. Honda Motor Company Ltd. Yuejin Motor Group Corporation. allowed it to overtake Proton in passenger-car sales in 2006. It outsold Proton in the domestic market both in 2006 and 2007. Perodua’s successful tie-up with Japanese manufacturers. Daewoo-FSO Motor S. However. The overseas brands saw their combined share of the passenger market fall slightly from 23% in 2005 to 22% in 2006. on the other hand.. . Mitsubishi Motors Corporation. as the domestic giant’s sales fell by 30%. based on existing manufacturers and brands in the country.national manufacturer Proton to local rival Perodua in 2006.7% with Honda pipped for fourth place by local firm Naza on 6. some major manufacturers are still absent leaving opportunity for extra competition.

the Proton Saga and its variants contribute to most of Proton's sales and revenues.Proton Iswara (1992) . the Saga was given a facelift and its name expanded as Proton Saga Iswara (also known in short as Proton Iswara). plastic bumpers. This particular model is .Proton Waja (2001) .Proton Saga (1985) . Proton Saga Iswara (1992) In 1992. Originally based on the 1983 Mitsubishi Lancer Fiore.Proton Staria GTi (1994) . Since 1985. side mouldings. coloured door handles.Gen-2 (2004) .Proton Putra (1995) .Proton Wira (1993) . before a successor designed in-house by Proton was launched to replace the ageing platform in 2008. grooved taillight clusters and rear number plate repositioned to the bumper.Arena (2002) . after a species of butterfly. The Saga is also the longest surviving model produced by Proton.Product Offerings .Perdana V6 (1998) . Modifications included slimmer headlights.Proton Savvy (2005) .Proton Tiara (1996) .Proton Juara (2001) . soldiering on for nearly 22 years. the Saga first debuted in September 1985 and retained its core Fiore design for two decades.Proton Persona (2007) Proton Saga (1985) The Proton Saga is the first car produced by Malaysian auto manufacturer Proton.

The new Satria Replacement Model (SRM). Production started in 1995 for the first generation and ended in 2005. The Saga continued to receive minor updated until 2008. the Proton Saga. boot space was reduced by half to accommodate the NGV tank and there are only a few petrol stations by Malaysian oil-giant Petronas. Proton Putra (1995) . The name Satria which means knight in Sanskrit was chosen for Proton's 3-door hatchback to reflect the sportiness of the car. when a second generation Saga was introduced as a sub-compact model instead. known as Proton Satria Neo was launched on 16 June 2006. as a flagship compact model for Proton. Proton Staria GTi (1994) The Proton Satria was a hatchback produced by Proton. Proton Wira (1993) The Proton Wira is a car manufactured by Malaysian carmaker Proton. a facelifted version of Proton's first model. released as a four-door saloon and four-door hatchback beginning 1993.used as taxis in Malaysia and some are converted to NGV. Due to the modification. The Wira was intended as a newer alternative to the Proton Saga Iswara.

Proton Juara (2001) . Perdana V6 (1998) In 1999. The Tiara was powered by a 1. It was built under licence from PSA Peugeot Citroën by Proton from 1996 to 2000. With Lotus-tuned and upgraded suspension settings. the car is a 2-door sporty coupe based on the Mitsubishi Mirage. tail lights and bumpers than the Citroën AX. the Putra was well-received and commands good second-hand value. the car handles well through tight corners and it is a good high speed cruiser.1L engine and featured a different grille. The so-called Proton Perdana V6 also had a new bodykit and 16" rims.0 L 6A12 V6 engine (also sourced by Mitsubishi) into the Perdana. Its successor is the Proton Savvy. The original Perdana soldiered on for a short while before it was dropped. Proton Tiara (1996) The Proton Tiara was a supermini class 5 door compact car based on the Citroën AX. Proton shoehorned a 2. After that.The Proton Putra is also sold in the United Kingdom and Australia as the Proton Coupe or Proton M21. Considered by many as one of the better looking of the Mitsubishi-based models.

the car was fitted with a Cam Pro engine which has been re-tuned to boost the horsepower to 86 kW (115 bhp) and 155 N-m of torque. The word Waja translates into English as "steel" while Impian translates into "dreams" or "ambition".The van's name was derived from the Malay language. which was powered by a Renault engine). Proton decided that the Juara is essentially a Mini-MPV (Multi-Purpose Vehicle) and became the platform in its advertising and promotional campaign. as the CamPro was originally developed for the Waja.The Proton Juara was a microvan produced by Malaysian carmaker Proton between 2001 and 2003. but was deemed not ready for production when the Waja was launched. The design and production of the Juara marked a notable departure from Proton's traditional preference towards saloons and hatchbacks. However. In its marketing campaign. The name Impian was chosen as it was considered to be a more pleasant sounding word for the international market. meaning "champion". including a space-robbing rear centre console that restricts seating to four persons. a variant for the executive market with a 250mm wheelbase stretch and luxury fittings and accessories. the car's chassis and engine were sourced and adapted from Mitsubish (except for the 1. This made it go full-circle. It is fitted with powertrain from the Proton Perdana V6. With a selling price of about twice that of a Waja. Proton Waja (2001) The Proton Waja (Proton Impian in Europe) is the first Proton to be designed and styled in-house. the Chancellor is a very rare sight on Malaysian roads.800 cc variant. hence debuting in the Proton Gen-2. The facelifted 2007 Proton Waja was launched on 19 January 2007 with the new grille nearly identical to the Proton Savvy. making the Juara the first van to be manufactured by Proton. In January 2006. The Waja was also released as the Proton Chancellor in late 2005. .

The Gen. Later models used improved quality materials and assistance from the TUV of Germany to help maintain the quality improvements. The Gen. launched on February 8. the Arena is the only form of pickup truck by Proton. is considered by many to be the best-looking Proton.2. a hatchback design. and is the only Proton model to enjoy significantly more popularity in its export market than domestically.2 was the first Proton to receive the (inappropriately) named CamPro engine. 2004. very low quality of materials and fit and finish of interior components seriously hurt the public's perception of the quality of the vehicle at launch.to mid-range torque (pulling puwer). due to a late decision to drop Camshaft Profiling from the engine feature-list in production models. It has a minimalist and modern interior with design cues from the Lotus subsidiary. which at launch was widely criticised for the lack of low. Proton still continued to sell the Wira after the Gen. due primarily to the popularity of sedan/saloon vehicles in the target market.Arena (2002) The Proton Arena (or the Proton Jumbuck in the United Kingdom and Australia) is a small front wheel drive coupé utility manufactured by Malaysian automaker Proton.2 was launched. Introduced in 2002. However. Gen-2 (2004) The Proton Gen-2 is the first fully Malaysian-developed (including chassis and engine) Proton car and the replacement model for the Proton Wira. Attempts to improve this torque deficit by adjusting ECU parameters .

making the car as the most fuel-efficient Malaysian car as verified by Malaysian Book of Records.6 liter sedan is based on the Proton Gen-2 and features a sedan body instead of the Gen-2's hatchback body. Even with very good fuel efficiency the car maintenance were reportly to be very high even surpassing the Proton Waja.08/km of fuel). Proton Persona (2007) The Proton Persona was launched on 15 August 2007. The 1. This is because of the use of the European Renault engine. The Persona is rebadged as the Proton Gen-2 Persona in the UK market. . 2005. presumably due to the missing engine feature. Proton Savvy (2005) The Proton Savvy was launched on June 8. In an official on-road test made by Proton in mid-2006. Proton Savvy recorded the fuel consumption rate of about 24 km/L at constant speed of 90km/h (or about RM0. The 1. The car is fitted with an engine and a gearbox sourced from Renault.200 cc 5-door supermini car.have largely been unsuccessful. Published engine torque curves still show a pronounced dip in torque output in the crucial 2000-3000 RPM engine speed region. It retains the same 82kW Campro engine.

therefore. to learn that the Government is still willing to consider a strong strategic foreign partner in the future. Proton may need to collaborate with a foreign partner much in the way BMW and PSA Peugeot-Citroen are working together to develop new engines and technologies. including China and some Gulf Cooperation Council. which is the main staple of its product line. It is of some comfort. Proton has limited funds for research and development. The company needs more desirable models like the Persona. . many of the green engine technologies that are emerging as a result of rising fuel prices and global warming would dictate the direction of automotive development. or the 2. is hardly cutting-edge given today's technology. On its own. Many view Proton as a maker of cars that lack excitement but which are relatively cheap compared with Japanese or South Korean makes. and would have to maintain its recent improvements in quality as that would have a strong bearing on its acceptance level. And the bulk of its exports are mostly confined to less mature markets. But how many foreign stakeholders would be willing to invest the money in Proton to develop new infrastructure and facilities and share their latest technology without being given a substantial or controlling stake in the car maker? That is a matter for the Government to ponder on when the time comes. Proton's Campro engine. In the longer term. which has helped in reviving sales. Proton also lacks an engine or platform to expand into the SUV and MPV markets.0-litre and above segments.CRITICAL ISSUES/ CHALLENGES The Proton badge today does not carry much brand equity. A tie-up with a strong foreign brand will enable Proton to penetrate more discerning markets. and these are beyond Proton's capabilities.

the elegant Perdana V6. the proven Saga range. stamping. Esprit. testing. the Group has almost 12. The Group designs and produces cars for diverse consumer preferences. manufacturing. design.2. Currently. the Persona.MARKETING STRATEGY MARKETING OBJECTIVE PROTON commands a substantial share of the domestic market for passenger cars and over the years has been building up distribution networks in key market centres across the four regions: • South-East Asia. the Group provides comprehensive and versatile consultancy services to many of the world’s OEMs and Tier 1 suppliers. the desirable sporty Satria Neo and the „2008 Best Model of the Year‟ winner. Exige. T he portfolio of PROTON models includes the reliable family-sedan Waja. • United Kingdom / Western Europe. the world-renowned Lotus sports cars.with models such as Elise. . distribution and after-sales services. development. Through Lotus. from research. The Group conducts research in its centres in Malaysia and the United Kingdom on new technologies to create cars that are unique in both design and driving performance. the stylish Gen. The Group is also involved in financial services and property management in supporting the main business activities. Europa and the recently unveiled Evora (which will be available in the first half of 2009) to suit a range of customer demands and preferences. research & development. casting. The Group also has in its portfolio. The main business activities of the Group encompass vehicle engineering. the fun-to-drive Savvy. and • Australasia. the versatile Arena.000 employees who are involved in the whole value chain of the business. • the Middle East.

MARKET SEGMENTATION Quality is about customer satisfaction and meeting customers’ expectations. the Group established a ‘Voice of Customer’ framework to facilitate feedback on quality issues from the market.machining and assembly to marketing. from the market feedback gauged via warranty provisions and . This is vital in order to establish quick and effective counter-measures to resolve critical quality issues in the market in a timely manner while preventing recurrence of the quality issues in future models. Additionally. to say the least. During the year under review. Towards this end. distribution and after-sales services. customer complaints have reduced significantly and quality perception for PROTON products has greatly improved as reflected in the notable improvements in the CPC and DPU levels. On this scoresince the Persona and new Saga were introduced into the market. to improve quality in the market given the ever-changing expectations and quality perception among car buyers today. As such. Strong customer orientation and competitively priced products are the foundation of our business and essential to our success. It is indeed challenging. the key to improving quality in the market is to understand the needs and perceptions of our customers. delivery quality defect-per-unit (DPU) and warranty provisions. warranty claims and severity of the quality issue. CPI is a matrix that calculates and prioritises customer feedback based on aspects such as technical data. We aim to maintain market leadership by continuing to develop innovative products and satisfy our customers needs better and enhance profitability. The Group also gauged feedback on product quality in the market via indicators such as concerns per car (CPC). a new feedback mechanism called Customer Priority Index (CPI) was introduced with the aim to help drive and resolve quality issues in the market.

Product Quality Report (distributors’ feedback). to say the least. The Lotus Evora is the first new Lotus model to be launched in over 13 years. PROTON’s single-minded approach to renew its product line-up to meet the evolving needs and requirements of the buying public resulted in the roll-out of the Persona and subsequently the iconic Saga during the year under review. Exige and Europa. The Persona is the first to embody PROTON’s philosophy of manufacturing „the right car for the right market at the right time for the right price‟. PROTON is indeed pleased to note that the response to date from car owners has been extremely positive.000 units within six months since its launch. . Having invested much time and effort in the three years that are typically required to conceive and develop new models.000 in bookings as at end July 2008. Entering the market above the Elise. Lotus Group International Limited (“Lotus”) has also unveiled a brand new thoroughbred that is set to take the world of performance cars by storm. The experience and lessons PROTON has garnered over the years have been embedded into this new model. Within the PROTON Group. Both the Persona and Saga are also expected to contribute significantly to PROTON’s export sales in the very near future. The Persona was followed by the unveiling of the new Saga. This has translated into bookings of almost 70. we have recorded remarkable improvements that reflect PROTON’s strong commitment to satisfying our customers’ needs. MARKET POSITIONING Launch of New Products The engine of growth for any car manufacturer lies in its products. the car that remains the embodiment of Malaysia’s aspirations to be an internationally competitive auto manufacturer. The Persona has received over 50. It is currently the fastest-selling model in PROTON’s history.

this new Lotus will be available in the first half of 2009 and is expected to contribute positively to the Lotus Group. but PROTON now has the benefit of experience and is rapidly strengthening the foundation for its future growth. Proton has commanded the local automotive market. TARGET MARKETS - Proton is the biggest Malaysian automobile manufacturer. but must also be committed to carry out long-range initiatives aimed at further strengthening its engineering and manufacturing foundations. The Group must not only be flexible and adapt to the constantly changing environment. Australia. to prosper and thrive. improved quality and value for money product positioning. With its expanded product range. MARKETING STRATEGIES It is imperative that PROTON keeps its focus firmly on the road ahead. However. Most certainly the road ahead will be paved with challenges. - Malaysia’s Proton sets ambitious car export target. the PROTON brand will become increasingly attractive. As indicated in the previous year's report. PROTON has to expand its export potential further. PROTON cannot depend solely on the domestic market to grow. Proton automobiles are available in many countries such as China. Tangible and sustainable growth in the international market will be . This is what will drive sustainable growth for PROTON and positive returns for its shareholders. Singapore. Algeria and United Kingdom.

In July 2007. Whilst PROTON has already gained a foothold in some markets. Already. its strategies to grow the brand beyond Malaysian shores are beginning to show progress in terms of sales growth.the mainstay for PROTON as it aims to expand its market share and sales volume in the export markets. regards China as an important market and one that it should participate in to be a competitive automotive player in the long run. the Group is committed towards expanding its regional presence in terms of sales and distribution.PROTON is also expanding its non-manufacturing business by optimising revenue that can be obtained from its Group intellectual property. PROTON.000 units of Gen2 CBU cars over a period of 20 months. There is also large growth potential in this arrangement with Jinhua Youngman. Although the numbers are modest compared to other automotive manufacturers. like other automotive manufacturers. remains a very important market for many automotive manufacturers. The Chinese automotive market in particular. In line with PROTON's 10-year roadmap. to gain a . It must now also source components and identify manufacturing facilities that will optimise costs and efficiency. this is a significant achievement for PROTON. India. both in terms of CBU units to be exported. representing the largest single export order of PROTON cars since its establishment in 1983. Lotus Group International Ltd. China. this will also represent significant additional volume for their manufactured components. as well as expanded scope of opportunities in engineering services and technical assistance. and the Middle East. For the Malaysian vendor community. licensing of engine and platform. An example of this strategy can already be seen in the business arrangement entered into between PROTON and Jinhua Youngman. PROTON entered into a business arrangement with Jinhua Youngman Automobile Manufacturing Ltd (Jinhua Youngman) to supply 30. This business arrangement not only enables PROTON to indirectly enter the expanding Chinese automotive market. there is a need to explore new emerging markets to tap into. particularly in ASEAN. These cars will be rebadged and sold in the Chinese automotive market under the Europestar brand. but also enables its subsidiary.

This is reinforced by our winning strategy of introducing „the right car. for the right market. Other exciting offerings are also in the pipeline with replacements for the Waja and iconic Perdana on the drawing board. at the right price and at the right time‟. gen 2. pesona. waja. perdana. further solidifying our product line-up to include a high quality multi-purpose vehicle that can cater to the family-oriented contemporary lifestyle. wira. have successfully managed to excite car consumers in Malaysia during the year under review.2. savvy. The importance of ensuring we have a strong product portfolio is all the more crucial as it has a pivotal impact on our turnaround plans. Furthermore. Towards this end. we have continued to update and refresh our existing product lines to entice and attract customers. PROTON has identified contract manufacturing for other OEMs interested to enter this region as a possible means to supplement its own manufacturing volumes. To sustain this positive momentum. and the economical Savvy re-designed to give better value proposition to the buyers of the Savvy Lite. MARKETING MIX Product  Proton saga. with their new look and powerful CamPro CPS engine. iswara. these two models are performing tremendously well in the market to date. with the latter powered by the new CamPro IAFM engine during the year under review and suffice to note. The re-energised Waja and Gen. Staying on course. we will continue our research and development (R&D) efforts and comprehensive market surveys to gain a . This strategy was reflected in our newly introduced Persona and Saga models. particularly with regard to improved capacity utilisation. PROTON will be launching our first MPV in early 2009. PROTON is also mindful of the need to improve operational efficiency.strong foothold in the Chinese automotive engineering services market.

marked by the successful launch of the Persona in August 2007.027. The short intake manifold will allow more air to enter faster and be especially beneficial to engines at high Revolutions Per Minute (RPMs).2 now features a new bumper. body kit. better handling and improved quality. As a result of the exterior face-lift.97 . Product Refreshments Gen.2 was done in tandem with the initiation of the Persona project to take advantage of cost sharing given that both projects share similarities in terms of their interior design. colour and alloy rims. We also upgraded parts of the exterior and interior of the car based on customers’ feedback while introducing the much-anticipated CamPro CPS powertrain. followed closely by the unveiling of the new Saga in January 2008.320. we truly believe that this will bring us closer to achieving our goals of a dynamic product portfolio. the refreshed Gen.888.2 is set to become a highly competitive model in the sporty C-segment automotive category. as this system has been found to promote better mixing of fuel. Product Development With robust product planning.00 50. we were able to introduce both new and improved PROTON cars in the year under review.5GLi SE Aeroback Metallic) 42.3GLi SE (Metallic) WIRA Peca 1.2 The face-lift of Gen. With extra power.deeper understanding of the needs of our customer base.5GL (Metallic) WIRA 1. the Gen. Price SATRIA 1. The engine’s Variable Intake Manifold (VIM) switch alternates between a long intake manifold at low engine speeds and a short intake manifold at higher engine speeds. PROTON is applying a longer intake manifold to achieve slower air flow. By harnessing the right technology and keeping our finger on the pulse of customers’ requirements.12 47.

while expanding our reach in Iran.94 38.096.114. several ‘Service Campaigns’ were held during the year under review in our key export markets. Interest Rate is 3. which is crucial to our success in the Middle East.88% for 7 years and 3.81    Interest Rate is 3. . the Group successfully penetrated into China and Thailand. The year also saw the implementation of a special programme for semi knocked-down (SKD) and completely knocked-down (CKD) exports to Iran and China.88% for 7 years and 3.0(A) ISWARA Aeroback 1. Clearly.WAJA 1.6 DOCH Auto (Metallic) PERDANA V6 2. 2 years standard manufacturing warranty plus 3 years Extended Warranty. At the same time.3S-LMST (Metallic) 59.99% for 9 years. which are expected to contribute positively towards thenew financial year’s export volume growth PROTON’s technical support and after-sales service capabilities must be of high standards in order to further enhance PROTON’s brand equity in the international market.60 58. In terms of market expansion.500. the Middle East and Indonesia.50 106. Towards this end.6L SOCH (Manual) GEN-2 1. Promotion The year under review saw PROTON aggressively augmenting the International Sales & Services Division with additional human resources. these campaigns included customer-focused initiatives ranging from a 43-point check to discounts for spare parts. this investment reflects the importance of the export market in PROTON’s long-term growth. focusing primarily on technical support as well as after-sales and customer services.99% for 9 years. Also known as PROTON STAR.455. we re-energised the Saudi Arabian market.

Prospects The Indonesian Automotive Industry Association (Gaikindo) had forecasted a steady total industry volume growth over the next three years from 500. .000 in 2010. the Company has expanded its network by an additional four branches and five dealers. Since making in-roads into the Thai market. these campaigns are ideal platforms to bring PROTON closer to the international customer base. to enhance our understanding of the markets and provide better response to the customers.2 Persona in July 2008 and the new Saga before the end of 2008. Place Indonesia Performance and Operations PT Proton Edar Indonesia registered higher sales of 1. To achieve the anticipated sales increase and improve the after-sales support. Proton Motors (Thailand) Limited. Thailand Performance and Operations PROTON made its entry into Thailand on 30 January 2008 through its wholly-owned subsidiary. Within a short span of time. During the year. PROTON managed to successfully penetrate the Thai market with sales of its cars exceeding 1200 units within the first six months of its launch.422 units compared with 546 units in the previous fiscal year. The Company is expected to perform better in the next financial year with the launching of the Gen. there was also a marked increase in the frequency of visits by both the sales and technical teams to the various countries in which PROTON has presence.000 units in 2008 to 600. the company launched the Waja and Neo models in conjunction with the Indonesia International Motor Show 2007. In July 2007.Naturally.

PROTON captured 1. Sales were also further affected by the increased petrol prices and tightening of credit due to the sub-prime fall-out in the US. Prospects For financial year 2008/09. This reduction signaled the end of bumper quotas in the island state and resulted in distributors reducing their margins to clear outstanding stock. 80% of cars in Singapore are less than four years old while 90% are less than five years. The year also saw the introduction of Chinamade cars into Singapore. the overall UK total . PROTON aims to achieve sales of 4000 units through the sale of various models including the Savvy.3% of the market share in the passenger car segment and was ranked 8th overall. as banks were more cautious in lending money. the PROTON Persona launched in October 2007 received encouraging response and drew accolades from both thepress and customers. Neo and Persona.2. Singapore Performance and Operations The Certificate of Entitlement quota for cars in Singapore was lower by 3. Prospects Given the market conditions in Singapore. The reduction in quota. United Kingdom Overview Contrary to concerns surrounding the automotive industry. a number of initiatives are in the pipeline to increase our operational efficiency here. On another note. Currently. coupled with the introduction of China-made cars led to a 43% reduction of brands operating in our segment. Gen.1% in 2007.

5% and 3.2 model improved during the year and the Satria. four and five-door segments. now accounting for over 70% of the entire UK volume between them.5% during the period. and is forecasted to sustain its momentum. Sales of the Gen. Prospects In the second half of 2007 and early 2008. a slow-down in the housing market and rising cost of living. Sales of low CO2 tax band vehicles rose by 15%.3% respectively. usurping sales from the more traditional three. Proton Cars (UK) Ltd saw a reduction in sales by 8% during the year under review. the operating environment in the UK became more challenging with higher interest rates. With regards to body types. Performance and Operations Overall. Sales of ‘green’ cars were spearheaded by both the Government through vehicle taxation and manufacturers of highly fuel-efficient and low CO2 emission vehicles marketing its benefits. despite reduced marketing expenditure.400. the only significant growth came from MPVs which rose by over 16%. was well-received by dealers. Sales of diesel cars continued to rise. which was launched in March 2007. while maintaining a high level of support for our dealer network and customers.000 sales. . retail sales increased by 3. capturing over 44% of market share by end-2007. sales for Waja were impacted due to a drop in demand throughout the segment while the Savvy faced severe competition from other brands in its category. However. motoring press and the general public. One of the key topics that took centre-stage in 2007 was the ‘green issue’ which influenced the perception of the UK buying public. Given these market conditions.5% to reflect over 2. The year 2007 also saw the top ten market leaders focusing on private buyers with all of them seeing a substantial rise in sales. which bodes well for the brand in the long term. while private buyer sales were static. contributing only 43% of the total market share. Nevertheless.industry volume (TIV) in 2007 increased by approximately 2. Proton Cars (UK) is adopting a number of initiatives which will lower operating costs. The increase was due to the business and fleet sectors where sales rose by 5. while high tax band CO2 vehicle salesdropped by 17%.

grew by 10. The current shift of sales towards smaller vehicles is expected to continue as fuel prices continue to rise and the economy slows down.9% respectively whilst PROTON’s retail sales increased by 16%. The number of dealers is also estimated to increase slightly. .Australia Overview The total Australian vehicle sales grew by 9.2% and 5.1% and reached a record 1. high fuel prices are projected to shift customers’ preference to more fuel-efficient models which could translate to increased sales in the small and light vehicle segments. On top of this. However. Currently. Sales of smaller fuel-efficient vehicles accounted for the majority of the increase due to the increasing price of oil and rising interest rates. Proton Cars Australia will be implementing an aggressive rationalisation programme to improve dealer throughput and increase the yield in under-performing regions. which PROTON competes in. The Savvy in Australia.2 are expected to boost volume by 22% in the new financial year. Proton Cars Australia successfully increased its dealer network to 41 dealers nationally during this period.049 million units. Sales of the Savvy and Jumbuck also improved significantly towards the end of the year under review as a result of several innovative marketing campaigns. However. In addition. The small and light segments. the launch of Persona in May 2008 and the subsequent release of the face-lift Gen. The strong focus on these two key areas is expected to result in increased revenue and better operational returns. all main regions throughout Australia are covered. Performance and Operations The positive financial results were due to improved Lotus vehicle sales and reduced operational costs by Proton Cars Australia. the company also managed to increase retail sales during the financial year in the face of heavy discounting by its main competitors. Prospects Automotive sales in the coming financial year are expected to ease slightly on the back of rising interest rates.

It wants to reverse this negative perception that Malaysians have on its cars. The launch of the quality campaign was based on the commitment of ensuring all Proton cars were free of defects. Quality Control Campaign Quality Control campaign would address employees. Proton had always emphasized quality control in all aspects of its operations but it was now drawing on lessons from the past to ensure current levels of quality control were stepped up. and is to get rid of the negative perception of brand image. It is going down to the core of the problem and evaluating its product range and it’s suppliers to weed out the quality control issues. The scheme will help proton to improve sales amid unfavorable consumer sentiment due to employment market uncertainties and could help boost car sales and rejuvenate the local automotive industry. There is also zero incentive for those looking at a newer second hand car. even if it is a Perodua or Proton. Beside that. anyone who scraps their cars which are older than 10 years will receive a RM5000 discount to buy a new car. Proton had recently established a monitoring system to identify defects on the production line to respond faster to problems of defective components. Proton was looking . production practices and components manufactured by it’s suppliers to make improvements to Proton quality.000 and so far up to 2.CONTROLS/ACTION PLAN Implementation Strategic Implementation Plan Auto-scrapping Scheme Proton already has a scrapping scheme running since the year 2007 called Proton XChange where old cars over 10 years old and owned by the owner for at least 6 months. Once a car has been surrendered to Proton under the scheme it will be de-registered from the Road Transport Department and scrapped. registered and roadworthy can be traded in for RM 5. but only a new Proton.700 of such discounts have been issued.

China. 'Zero-Defect' Campaign Proton launched a 'zero-defect' campaign aimed at erasing a reputation for poor quality that has left it struggling to compete against foreign competitors. Nissan sales in January 2009 came in strong with a 17% increase in volume to 2. . The company will further tighten production controls and conduct audits before cars are rolled out to ensure that there are no rattles and squeaks any more. The high number of bookings for the Persona and Saga to date is reflective of growing customer confidence with regards to Proton's new commitment to quality. Perodua posted a 5 % decline to 9874 units. With the recent fuel hike. consumers want quality cars and they have high expectations. proton believe Exora will give a serious challenge to Toyata Avanza (maximum price: RM72000 for 1. to be powered by a 1. Proton registered a 4% decline in sales to 9874 units last month. Proton wants to focus on rebuilding the company. On the other hand.800cc). Proton's maiden multi-purpose vehicle (MPV) Despite the economic slowdown. while Toyota recorded a more worrying contraction of 41% in January sales. At this current price.to further tap the markets in Asian. product and profit and need to be prepared to compete globally. India and the Middle East. Proton also plans to fit all models with natural gas tanks from October to help motorists beat the rising cost of fuel. Car manufacturers were keeping mum on their new launches perhaps due to the fear of weak response as the economic outlook continued to look challenging. Proton's maiden multi-purpose vehicle (MPV) slated to be launched in April 2009 is expected to give a serious challenge to other comparable MPVs due to its competitive pricing and value for money.0% compared to the same month last year. to improve quality.500cc) and the Nissan Grand Livina (maximum price: RM97000 for 1. The focus is putting Proton on a better footing. would be priced below RM80000.285 units while its total industry value has dipped by 5. Proton Exora.600cc engine.

000 people are directly and indirectly linked to the automotive industry nationwide. The government’s plan. The UK (is also) contemplating the implementation of such a scheme in the near future to spur car sales. It could help the industry to dispose old cars more efficiently and responsibly whilst protecting the environment. The scheme was also an important tool in the automotive industry’s environment management. The government today announced that it will assist in the auto-scrapping scheme for Proton and Perodua. . the car cannot be returned. was timely and would positively impact the industry. announced under the second economic stimulus package tabled today. Malaysia will follow the footsteps of other countries like Spain. France and Italy. Proton need every bit of help from the Government during this difficult period to ensure its survival as close to 200.Contingency Plan The global and local automotive industries are facing one of the most challenging periods in recent history with buyers being cautious amid the global economic crisis. Once surrendered.

com/public/media/mediacentre/documents/annualreports/AReport_2005 _Full.proton.com/public/media/mediacentre/documents/annualreports/AReport_2007 .proton.proton.com/images/attachpic/g4/B400/B400F1844T909_8195ded601b2dd2aa ee71cb07bd4c006.pdf ANNUAL REPORT PROTON 2007 http://www.pdf ANNUAL REPORT PROTON 2005 http://www.pdf ANNUAL REPORT PROTON 2002 http://www.buildboard.pdf ANNUAL REPORT PROTON 2008 http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport_2003 _Full.proton.pdf ANNUAL REPORT PROTON 2006 http://www.com/public/media/mediacentre/documents/annualreports/AReport_2002 _Full.Bibiolografi Analysis SWOT Proton http://g4.proton.com/public/media/mediacentre/documents/annualreports/AReport_2006 .pdf ANNUAL REPORT PROTON 2003 http://www.com/public/media/mediacentre/documents/annualreports/AReport_2008 .pdf .

Lamb and F.%20Company%20Focus/By%20Co .my/indeotx.(2008).com/article/companyNews/idINBKK21192820070927?pageNumber=2&vi rtualBrandChannel=0 Marketing plan From Wikipedia.livemint.com.com/2008/05/26235421/Malaysia8217s-Proton-back-i.proton.Chapter 2.org/wiki/List_of_Proton_car_models Malaysia’s Proton back in profit on higher sales http://www.com.Hair.html Malaysia’s Proton sets ambitious car export target http://in. http://en.pdf List of Proton car models. Jr.Thomos South-Western Financial Statement 2008 annual report http://www.reuters.html Proton Edar http://www. introduction to Marketing (9th edition).strategy marketing Carl McDaniel. the free encyclopedia http://en. ChAerles W.proton2020.proton-edar.wikipedia.php Proton and Lotus Top the Aussie Vehicle Sales Growth Charts http://www.org/wiki/Marketing_plan Promotion of Proton http://www.einvest.my/ArchiveCompanyFocus/1.proton.com/public/media/mediacentre/documents/annualreports/AReport_2008 _5.com/about-us.wikipedia.asp Proton Holding http://www.com.sg/160407.

pdf .mpany%20Name/Counter%20Name%20M%20-%20Z/Proton%2020041006.

Proton has limited funds for research and development. to learn that the Government is still willing to consider a strong strategic foreign partner in the future. On its own. including China and some Gulf Cooperation Council. It is of some comfort. But how many foreign stakeholders would be willing to invest the money in Proton to develop new infrastructure and facilities and share their latest technology without being . many of the green engine technologies that are emerging as a result of rising fuel prices and global warming would dictate the direction of automotive development.collaborate with a foreign partner much in the way BMW and PSA Peugeot-Citroen are working together to develop new engines and technologies. In the longer term. therefore. and these are beyond Proton's capabilities. And the bulk of its exports are mostly confined to less mature markets. A tie-up with a strong foreign brand will enable Proton to penetrate more discerning markets.

. MARKETING STRATEGY MARKETING OBJECTIVE PROTON commands a substantial share of the domestic market for passenger cars and over the years has been building up distribution networks in key market centres across the four regions: • South-East Asia. • the Middle East.given a substantial or controlling stake in the car maker? That is a matter for the Government to ponder on when the time comes.

The Group designs and produces cars for diverse consumer preferences. The Group also has in its portfolio. manufacturing. the proven Saga range. the fun-to-drive Savvy. the versatile Arena. The Group is also involved in financial services and property management in supporting the main business activities.2. the world-renowned Lotus sports cars. the stylish Gen. The main business activities of the Group encompass vehicle engineering.with . the desirable sporty Satria Neo and the ‘2008 Best Model of the Year’ winner. the elegant Perdana V6.• United Kingdom / Western Europe. distribution and after-sales services. the Persona. and • Australasia. T he portfolio of PROTON models includes the reliable family-sedan Waja. research & development.

development. stamping. The Group conducts research in its centres in Malaysia and the United Kingdom on new technologies to create cars that are unique in both design and driving performance. the Group has almost 12. Currently. casting. Esprit. the Group provides comprehensive and versatile consultancy services to many of the world’s OEMs and Tier 1 suppliers. Strong customer orientation and competitively priced products are the foundation of our business and essential to our success.000 employees who are involved in the whole value chain of the business. Exige. from research.models such as Elise. We aim to maintain market leadership by continuing to . design. machining and assembly to marketing. Through Lotus. testing. Europa and the recently unveiled Evora (which will be available in the first half of 2009) to suit a range of customer demands and preferences. distribution and after-sales services.

MARKET SEGMENTATION Quality is about customer satisfaction and meeting customers’ expectations. to say the least.develop innovative products and satisfy our customers needs better and enhance profitability. . the key to improving quality in the market is to understand the needs and perceptions of our customers. to improve quality in the market given the everchanging expectations and quality perception among car buyers today. As such. It is indeed challenging.

This is vital in order to establish quick and effective counter-measures to resolve critical quality issues in the market in a timely manner while preventing recurrence of the quality issues in future models. During the year under review. delivery quality defect-per-unit (DPU) and warranty provisions. warranty claims and severity of the quality issue.Towards this end. The Group also gauged feedback on product quality in the market via indicators such as concerns per car (CPC). . the Group established a ‘Voice of Customer’ framework to facilitate feedback on quality issues from the market. CPI is a matrix that calculates and prioritises customer feedback based on aspects such as technical data. a new feedback mechanism called Customer Priority Index (CPI) was introduced with the aim to help drive and resolve quality issues in the market.

MARKET POSITIONING Launch of New Products . we have recorded remarkable improvements that reflect PROTON’s strong commitment to satisfying our customers’ needs.On this scoresince the Persona and new Saga were introduced into the market. Additionally. from the market feedback gauged via warranty provisions and Product Quality Report (distributors’ feedback). customer complaints have reduced significantly and quality perception for PROTON products has greatly improved as reflected in the notable improvements in the CPC and DPU levels.

to say the least. the car that remains the embodiment of Malaysia’s aspirations to be an internationally competitive auto manufacturer. The Persona is the first to embody PROTON’s philosophy of manufacturing ‘the right car for the right market at the right time for the right price’. The Persona was followed by the unveiling of the new Saga.000 in bookings as at end July 2008. PROTON is indeed pleased to note that the response to date from car owners has been extremely positive. The Persona has received over 50. .The engine of growth for any car manufacturer lies in its products. PROTON’s singleminded approach to renew its product line-up to meet the evolving needs and requirements of the buying public resulted in the roll-out of the Persona and subsequently the iconic Saga during the year under review. Having invested much time and effort in the three years that are typically required to conceive and develop new models.

Both the Persona and Saga are also expected to contribute significantly to PROTON’s export sales in the very near future. Lotus Group International Limited (“Lotus”) has also unveiled a brand new thoroughbred that is set to take the world of performance cars by storm.000 units within six months since its launch. this new Lotus will be available in the first half of 2009 and is expected to contribute positively to the Lotus Group. Exige and Europa. . Within the PROTON Group. This has translated into bookings of almost 70. The Lotus Evora is the first new Lotus model to be launched in over 13 years. It is currently the fastest-selling model in PROTON’s history. Entering the market above the Elise.The experience and lessons PROTON has garnered over the years have been embedded into this new model.

MARKETING STRATEGIES . Australia.TARGET MARKETS – Proton is the biggest Malaysian automobile manufacturer. – Malaysia’s Proton sets ambitious car export target. Proton automobiles are available in many countries such as China. Singapore. Algeria and United Kingdom. Proton has commanded the local automotive market.

but must also be committed to carry out long-range initiatives aimed at further strengthening its engineering and manufacturing foundations. The Group must not only be flexible and adapt to the constantly changing environment. the PROTON brand will become increasingly attractive. This is what will drive sustainable growth for PROTON and positive returns for its shareholders. improved quality and value for money product positioning.It is imperative that PROTON keeps its focus firmly on the road ahead. . Most certainly the road ahead will be paved with challenges. but PROTON now has the benefit of experience and is rapidly strengthening the foundation for its future growth. With its expanded product range.

Tangible and sustainable growth in the international market will be the mainstay for PROTON as it aims to expand its market share and sales volume in the export markets. As indicated in the previous year's report. Whilst PROTON has already gained a foothold in some markets. the Group is committed towards expanding its regional presence in terms of sales and distribution. to prosper and thrive. It must now also source components and identify manufacturing facilities that will optimise costs and efficiency. its strategies to grow the brand beyond Malaysian shores are beginning to show progress in terms of sales growth. and the Middle East. PROTON has to expand its export potential further.However. Already. there is a need to explore new emerging markets to tap into. . particularly in ASEAN. In line with PROTON's 10-year roadmap. China. India. PROTON cannot depend solely on the domestic market to grow.

both in terms of CBU units to be exported.The Chinese automotive market in particular. PROTON entered into a business arrangement with Jinhua Youngman Automobile Manufacturing Ltd (Jinhua Youngman) to supply 30. These cars will be rebadged and sold in the Chinese automotive market under the Europestar brand. remains a very important market for many automotive manufacturers. licensing of engine and platform. Although the numbers are modest compared to other automotive manufacturers. PROTON. this is a significant achievement for PROTON. .000 units of Gen2 CBU cars over a period of 20 months. There is also large growth potential in this arrangement with Jinhua Youngman. like other automotive manufacturers. representing the largest single export order of PROTON cars since its establishment in 1983. In July 2007. as well as expanded scope of opportunities in engineering services and technical assistance. regards China as an important market and one that it should participate in to be a competitive automotive player in the long run.

Lotus Group International Ltd. to gain a strong foothold in the Chinese automotive engineering services market. This business arrangement not only enables PROTON to indirectly enter the expanding Chinese automotive market. An example of this strategy can already be seen in the business arrangement entered into between PROTON and Jinhua Youngman. PROTON has identified . this will also represent significant additional volume for their manufactured components. but also enables its subsidiary.PROTON is also expanding its nonmanufacturing business by optimising revenue that can be obtained from its Group intellectual property.For the Malaysian vendor community. particularly with regard to improved capacity utilisation. Towards this end. PROTON is also mindful of the need to improve operational efficiency.

wira. savvy. with the latter powered by the new CamPro IAFM engine during the year under review and suffice to note. iswara. waja. perdana. at the right price and at the right time’. pesona.contract manufacturing for other OEMs interested to enter this region as a possible means to supplement its own manufacturing volumes. This strategy was reflected in our newly introduced Persona and Saga models. . gen 2. for the right market. The importance of ensuring we have a strong product portfolio is all the more crucial as it has a pivotal impact on our turnaround plans. This is reinforced by our winning strategy of introducing ‘the right car. MARKETING MIX Product • Proton saga. these two models are performing tremendously well in the market to date.

further solidifying our product line-up to include a high quality multi-purpose vehicle that can cater to the family-oriented contemporary lifestyle. PROTON will be launching our first MPV in early 2009. Staying on course. The re-energised Waja and Gen.2. have successfully managed to excite car consumers in Malaysia during the year under review. we will continue our research and development (R&D) efforts and comprehensive market surveys to gain a .Furthermore. we have continued to update and refresh our existing product lines to entice and attract customers. and the economical Savvy re-designed to give better value proposition to the buyers of the Savvy Lite. with their new look and powerful CamPro CPS engine. To sustain this positive momentum. Other exciting offerings are also in the pipeline with replacements for the Waja and iconic Perdana on the drawing board.

Product Refreshments Gen. By harnessing the right technology and keeping our finger on the pulse of customers’ requirements. we truly believe that this will bring us closer to achieving our goals of a dynamic product portfolio. Product Development With robust product planning.2 . we were able to introduce both new and improved PROTON cars in the year under review.deeper understanding of the needs of our customer base. marked by the successful launch of the Persona in August 2007. followed closely by the unveiling of the new Saga in January 2008.

colour and alloy rims. better handling and improved quality. the refreshed Gen.The face-lift of Gen. PROTON is applying a longer intake manifold to achieve slower air flow. the Gen. as this system has been found to promote better mixing of fuel.2 now features a new bumper. The short intake manifold will allow more air to enter faster and be especially beneficial to engines at high Revolutions Per Minute (RPMs).2 was done in tandem with the initiation of the Persona project to take advantage of cost sharing given that both projects share similarities in terms of their interior design.2 is set to become a highly competitive model in the sporty C-segment automotive category. With extra power. As a result of the exterior face-lift. . body kit. The engine’s Variable Intake Manifold (VIM) switch alternates between a long intake manifold at low engine speeds and a short intake manifold at higher engine speeds. We also upgraded parts of the exterior and interior of the car based on customers’ feedback while introducing the much-anticipated CamPro CPS powertrain.

5GLi SE Aeroback Metallic) 50.60 GEN-2 1.3S-LMST (Metallic) 38.Price SATRIA 1.5GL (Metallic) 47.096.97 WAJA 1.6 DOCH Auto (Metallic) 58. .888.455.94 ISWARA Aeroback 1.0(A) 106.500.027.99% for 9 years.00 WIRA 1.114.320.6L SOCH (Manual) 59.50 PERDANA V6 2.3GLi SE (Metallic) 42.88% for 7 years and 3.81 • Interest Rate is 3.12 WIRA Peca 1.

focusing primarily on technical support as well as after-sales and customer services. .• 2 years standard manufacturing warranty plus 3 years Extended Warranty. this investment reflects the importance of the export market in PROTON’s long-term growth. the Middle East and Indonesia.99% for 9 years. while expanding our reach in Iran. Promotion The year under review saw PROTON aggressively augmenting the International Sales & Services Division with additional human resources. • Interest Rate is 3. In terms of market expansion.88% for 7 years and 3. the Group successfully penetrated into China and Thailand. Clearly.

During the year. Towards this end. which are expected to contribute positively towards thenew financial year’s export volume growth PROTON’s technical support and after-sales service capabilities must be of high standards in order to further enhance PROTON’s brand equity in the international market. Naturally. Also known as PROTON STAR. these campaigns are ideal platforms to bring PROTON closer to the international customer base.At the same time. there was also a marked increase in the . which is crucial to our success in the Middle East. we re-energised the Saudi Arabian market. The year also saw the implementation of a special programme for semi knocked-down (SKD) and completely knocked-down (CKD) exports to Iran and China. several ‘Service Campaigns’ were held during the year under review in our key export markets. these campaigns included customer-focused initiatives ranging from a 43-point check to discounts for spare parts.

Place Indonesia Performance and Operations . to enhance our understanding of the markets and provide better response to the customers.frequency of visits by both the sales and technical teams to the various countries in which PROTON has presence.

PT Proton Edar Indonesia registered higher sales of 1. the company launched the Waja and Neo models in conjunction with the Indonesia International Motor Show 2007.000 units in 2008 to 600. To achieve the anticipated sales increase and improve the after-sales support. . the Company has expanded its network by an additional four branches and five dealers. Prospects The Indonesian Automotive Industry Association (Gaikindo) had forecasted a steady total industry volume growth over the next three years from 500.2 Persona in July 2008 and the new Saga before the end of 2008. The Company is expected to perform better in the next financial year with the launching of the Gen.422 units compared with 546 units in the previous fiscal year.000 in 2010. In July 2007.

Neo and Persona. Within a short span of time. . PROTON managed to successfully penetrate the Thai market with sales of its cars exceeding 1200 units within the first six months of its launch.2.3% of the market share in the passenger car segment and was ranked 8th overall. Proton Motors (Thailand) Limited.Thailand Performance and Operations PROTON made its entry into Thailand on 30 January 2008 through its wholly-owned subsidiary. Since making in-roads into the Thai market. PROTON aims to achieve sales of 4000 units through the sale of various models including the Savvy. PROTON captured 1. Prospects For financial year 2008/09. Gen.

The reduction in quota. Currently. This reduction signaled the end of bumper quotas in the island state and resulted in distributors reducing their margins to clear outstanding stock.1% in 2007. The year also saw the introduction of Chinamade cars into Singapore. . coupled with the introduction of China-made cars led to a 43% reduction of brands operating in our segment.Singapore Performance and Operations The Certificate of Entitlement quota for cars in Singapore was lower by 3. 80% of cars in Singapore are less than four years old while 90% are less than five years.

a number of initiatives are in the pipeline to increase our operational efficiency here. as banks were more cautious in lending money.Sales were also further affected by the increased petrol prices and tightening of credit due to the sub-prime fall-out in the US. Prospects Given the market conditions in Singapore. On another note. the PROTON Persona launched in October 2007 received encouraging response and drew accolades from both thepress and customers. United Kingdom Overview .

Sales of ‘green’ cars were . The year 2007 also saw the top ten market leaders focusing on private buyers with all of them seeing a substantial rise in sales. capturing over 44% of market share by end-2007.400. the overall UK total industry volume (TIV) in 2007 increased by approximately 2. now accounting for over 70% of the entire UK volume between them. while private buyer sales were static. four and five-door segments. usurping sales from the more traditional three. One of the key topics that took centre-stage in 2007 was the ‘green issue’ which influenced the perception of the UK buying public. The increase was due to the business and fleet sectors where sales rose by 5.3% respectively. and is forecasted to sustain its momentum. With regards to body types. contributing only 43% of the total market share.Contrary to concerns surrounding the automotive industry.000 sales.5% and 3. the only significant growth came from MPVs which rose by over 16%. Sales of diesel cars continued to rise.5% to reflect over 2.

which bodes well for the brand in the long term. Sales of low CO2 tax band vehicles rose by 15%. However. while high tax band CO2 vehicle salesdropped by 17%. Performance and Operations Overall. motoring press and the general public. despite reduced marketing expenditure. was well-received by dealers. retail sales increased by 3.2 model improved during the year and the Satria. Proton Cars (UK) Ltd saw a reduction in sales by 8% during the year under review.spearheaded by both the Government through vehicle taxation and manufacturers of highly fuel-efficient and low CO2 emission vehicles marketing its benefits. Sales of the Gen.5% during the period. . which was launched in March 2007. Nevertheless. sales for Waja were impacted due to a drop in demand throughout the segment while the Savvy faced severe competition from other brands in its category.

Proton Cars (UK) is adopting a number of initiatives which will lower operating costs.Prospects In the second half of 2007 and early 2008. which . the operating environment in the UK became more challenging with higher interest rates. a slow-down in the housing market and rising cost of living. Sales of smaller fuel-efficient vehicles accounted for the majority of the increase due to the increasing price of oil and rising interest rates. Australia Overview The total Australian vehicle sales grew by 9.1% and reached a record 1.049 million units. while maintaining a high level of support for our dealer network and customers. Given these market conditions. The small and light segments.

9% respectively whilst PROTON’s retail sales increased by 16%. The current shift of sales towards smaller vehicles is expected to continue as fuel prices continue to rise and the economy slows down. grew by 10. Performance and Operations The positive financial results were due to improved Lotus vehicle sales and reduced operational costs by Proton Cars Australia.2% and 5. Prospects Automotive sales in the coming financial year are expected to ease slightly on the back of rising interest rates. high fuel prices are projected to shift customers’ preference to more fuel-efficient models which could translate to increased sales in the . the company also managed to increase retail sales during the financial year in the face of heavy discounting by its main competitors. On top of this. In addition.PROTON competes in.

the launch of Persona in May 2008 and the subsequent release of the face-lift Gen. Proton Cars Australia successfully increased its dealer network to 41 dealers nationally during this period. However.small and light vehicle segments. The strong focus on these two key areas is expected to result in increased revenue and better operational returns. CONTROLS/ACTION PLAN . Sales of the Savvy and Jumbuck also improved significantly towards the end of the year under review as a result of several innovative marketing campaigns. Currently.2 are expected to boost volume by 22% in the new financial year. Proton Cars Australia will be implementing an aggressive rationalisation programme to improve dealer throughput and increase the yield in under-performing regions. The Savvy in Australia. The number of dealers is also estimated to increase slightly. However. all main regions throughout Australia are covered.

700 of such discounts have been issued. but only a new Proton.Implementation Strategic Implementation Plan Auto-scrapping Scheme Proton already has a scrapping scheme running since the year 2007 called Proton XChange where old cars over 10 years old and owned by the owner for at least 6 months. Once a car has been surrendered to Proton under the scheme it will be de-registered from the Road Transport Department and scrapped. Beside that. There is also zero incentive for those looking at a newer .000 and so far up to 2. anyone who scraps their cars which are older than 10 years will receive a RM5000 discount to buy a new car. registered and roadworthy can be traded in for RM 5.

It wants to reverse this negative perception that Malaysians have on its cars. Proton had always emphasized quality control in all aspects of its operations but it was now drawing on lessons from the past to ensure current levels of quality control were stepped up. Quality Control Campaign Quality Control campaign would address employees. The scheme will help proton to improve sales amid unfavorable consumer sentiment due to employment market uncertainties and could help boost car sales and rejuvenate the local automotive industry. Proton had recently established a monitoring system to identify defects on the . and is to get rid of the negative perception of brand image.second hand car. The launch of the quality campaign was based on the commitment of ensuring all Proton cars were free of defects. even if it is a Perodua or Proton. It is going down to the core of the problem and evaluating its product range and it’s suppliers to weed out the quality control issues. production practices and components manufactured by it’s suppliers to make improvements to Proton quality.

Proton wants to focus on rebuilding the company. consumers want quality cars and they have high expectations. With the recent fuel hike. India and the Middle East. product and profit and need to be prepared to compete globally. The focus is putting Proton on a better footing. . 'Zero-Defect' Campaign Proton launched a 'zero-defect' campaign aimed at erasing a reputation for poor quality that has left it struggling to compete against foreign competitors. to improve quality. China. The high number of bookings for the Persona and Saga to date is reflective of growing customer confidence with regards to Proton's new commitment to quality.production line to respond faster to problems of defective components. Proton also plans to fit all models with natural gas tanks from October to help motorists beat the rising cost of fuel. Proton was looking to further tap the markets in Asian.

At this current price. would be priced below RM80000. Perodua posted a 5 % decline to .The company will further tighten production controls and conduct audits before cars are rolled out to ensure that there are no rattles and squeaks any more.800cc). to be powered by a 1.600cc engine.500cc) and the Nissan Grand Livina (maximum price: RM97000 for 1. Proton's maiden multi-purpose vehicle (MPV) Despite the economic slowdown. Proton's maiden multi-purpose vehicle (MPV) slated to be launched in April 2009 is expected to give a serious challenge to other comparable MPVs due to its competitive pricing and value for money. Proton Exora. proton believe Exora will give a serious challenge to Toyata Avanza (maximum price: RM72000 for 1. Proton registered a 4% decline in sales to 9874 units last month.

285 units while its total industry value has dipped by 5. announced under the second economic stimulus package tabled today. The government’s plan. while Toyota recorded a more worrying contraction of 41% in January sales. Contingency Plan The global and local automotive industries are facing one of the most challenging periods in recent history with buyers being cautious amid the global economic crisis.0% compared to the same month last year.000 people are directly and indirectly linked to the automotive industry nationwide. Proton need every bit of help from the Government during this difficult period to ensure its survival as close to 200. The government today announced that it will assist in the auto-scrapping scheme for Proton and Perodua. On the other hand.9874 units. was timely and would positively impact the industry. Nissan sales in January 2009 came in strong with a 17% increase in volume to 2. . Car manufacturers were keeping mum on their new launches perhaps due to the fear of weak response as the economic outlook continued to look challenging.

.The scheme was also an important tool in the automotive industry’s environment management. Once surrendered. It could help the industry to dispose old cars more efficiently and responsibly whilst protecting the environment. Malaysia will follow the footsteps of other countries like Spain. The UK (is also) contemplating the implementation of such a scheme in the near future to spur car sales. France and Italy. the car cannot be returned.

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pdf ANNUAL REPORT PROTON 2002 http://www.com/public/media/mediacentre/documents/annualreports/AReport_2002 _Full.buildboard.proton.com/images/attachpic/g4/B400/B400F1844T909_8195ded601b2dd2aa ee71cb07bd4c006.Bibiolografi Analysis SWOT Proton http://g4.pdf ANNUAL REPORT PROTON 2003 .

pdf ANNUAL REPORT PROTON 2006 http://www.proton.proton.com/public/media/mediacentre/documents/annualreports/AReport_2005 _Full.com/public/media/mediacentre/documents/annualreports/AReport_2006 .pdf ANNUAL REPORT PROTON 2007 .proton.http://www.com/public/media/mediacentre/documents/annualreports/AReport_2003 _Full.pdf ANNUAL REPORT PROTON 2005 http://www.

Thomos South-Western .pdf Chapter 2.com/public/media/mediacentre/documents/annualreports/AReport_2008 .Hair.http://www. Jr.(2008).strategy marketing Carl McDaniel.proton. introduction to Marketing (9th edition).com/public/media/mediacentre/documents/annualreports/AReport_2007 .Lamb and F.pdf ANNUAL REPORT PROTON 2008 http://www. ChAerles W.proton.

pdf List of Proton car models.org/wiki/List_of_Proton_car_models Malaysia’s Proton back in profit on higher sales http://www.proton.livemint.Financial Statement 2008 annual report http://www.html Malaysia’s Proton sets ambitious car export target .com/public/media/mediacentre/documents/annualreports/AReport_2008 _5.wikipedia. http://en.com/2008/05/26235421/Malaysia8217s-Proton-back-i.

proton-edar.http://in.wikipedia.reuters.html Proton Edar http://www.com.proton.com. the free encyclopedia http://en.com/about-us.php Proton and Lotus Top the Aussie Vehicle Sales Growth Charts http://www.com/article/companyNews/idINBKK21192820070927? pageNumber=2&virtualBrandChannel=0 Marketing plan From Wikipedia.asp .sg/160407.my/indeotx.org/wiki/Marketing_plan Promotion of Proton http://www.proton2020.

Proton Holding http://www.%20Company %20Focus/By%20Company%20Name/Counter%20Name%20M%20-%20Z/Proton %2020041006.com.pdf .my/ArchiveCompanyFocus/1.einvest.

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