Proton Looks to India for Export Sales

By Brendan Moore

08.07.2009

proton-logoProton, the inscrutable Malaysian auto manufacturer, has announced that they intend to sell their cars in India.

Proton has some sales in the Southeast Asia market, and some sales in the Middle East and Asia, but over 90% of their annual sales are still in their home country of Malaysia.

Proton used to have a protected market until a few years ago, when the Malaysian government liberalized their home market, which led to Proton’s sales plummeting. Proton had, and still has, some quality issues with their vehicles, and once Malaysians were able to buy Japanese cars, they did.

The company plunged into a financial abyss, prompting intense speculation at the time that a partnership with either VW or GM was imminent. But, Proton rebuffed both those suitors, and decided to go it alone.

Proton’s financial numbers have improved, but the consensus is that they still need a partner as their lineup of vehicle platforms is getting long in the tooth, and they really don’t have the R&D budget to keep up with other manufacturers.

Proton has been keen to enter the growing Indian auto market for some years and the company was reportedly in talks with Indian automaker Mahindra & Mahindra as well as contract manufacturer Argentum Motors. Those efforts came to naught, but that hasn’t stopped the company from making the statement in the last few months that they intend to enter the Indian market “shortly”.

As a follow-up, Proton Holdings Berhad Managing Director H S Z A B Syed Mohamed Tahir stated recently, “On this note, we will be launching new programmes regionally, specifically in ASEAN, China, India and the Middle East… Proton will leave no stone unturned in our vision to strengthen our brand equity within the local and regional arena.”

But, of course, no specific date, and, no further comment from Proton whatsoever.

Proton has a history of making public statements that are not specific as it relates to their business, and subsequently never following up with details, leaving the initial statement to slowly fade away. Time will tell if this is one of those instances; or, if, Proton has something actually cooking in India as I type this.

India would probably be a good market for Proton, with much of the local competition at the same stage of technology and quality as they are, provided they can stay at the right price point. If they try to go upmarket in India with some of their higher-priced cars, they will run right into the same Japanese competition that Proton had trouble with in their home market.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. Proton? Wow, didn’t see that coming. I drove one around for three weeks but it was so bland I can hardly remember anything about it. When the fellow at the rental agency said we had a Proton, I asked him what that was, since I had never heard of it before that day.

    I can’t see them making much of a dent in the Indian market.

  2. You know they own Lotus……the hot bed of engineering…

  3. I think most people know Proton owns Lotus, and Proton has had some help from Lotus on some suspension and exterior design pieces, but that’s about it.

    Lotus makes a small profit or none at all and can’t help Proton with any money and they don’t have the resources to supply enough people to Proton to engineer whole platforms and ignore their other clients. If Proton could make some more money, then maybe Lotus could do more for them.

    Proton has been in a very bad way ever since their home market was opened up and they really should get a big partner ASAP. Even the Malaysian government, who owns part of Proton, says that now. I’m kind of surprised the author didn’t mention the government ownership.

  4. Proton suffers from a poor reputation in Asia, so it might be hard for them to succeed in India. Their reputation is known in India as well.

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