Things going from bad to worse for Proton dealers

the star
Nation
Thursday May 24, 2007


Things going from bad to worse for Proton dealers

By PAUL CHOO

KUALA LUMPUR: The situation is growing increasingly bleak for Proton Edar car dealers here, with new models and car affordability leading to falling sales.

In the first quarter of the year, 93% of Proton Edar dealer's network did not break even, according to Proton Edar Dealers Association Malaysia president Wan Ahmad Sepwan.

He said a dealer needed to sell at least 40 units per month to break even, a figure that is not being met as dealers are currently only selling an average of 10 to 15 units per month.

“The accumulated total loss of the dealer's network is estimated to be in excess of RM20mil for the financial year 2006/2007,” said Wan Ahmad.

“Currently Proton does not have a good price-spread among its models. The Proton Gen2, Satria Neo, Savvy and Wira are all priced between RM40,000 and RM50,000. A better price segmentation is needed to cater to different income groups.”

He added that the implementation of the National Automotive Policy early last year, in addition to the tightening of hire purchase loan approvals by Bank Negara, had further affected sales.

He said the association found that most car buyers were not able to buy a new Proton due to the rigidity of the loans and the low trade-in price for their existing cars.

Speaking at a conference here yesterday, Wan Ahmad and other association members also pleaded with the Government to hasten its decision in naming Proton's strategic technical partner.

“The uncertainty of forging a strategic alliance with a foreign partner and the lack of insight in Proton's future planning is further damaging our already falling sales,” he said.