Malaysia’s Proton sees end of the road of losses

Malaysia's Proton Sees End Of The Road Of Losses
Proton’s compact hatchback Suprima by Italdesign (model discontinued in 2019)

Malaysian car maker Proton would return to profit this year after years of losses, driven by new product launches and aggressive cost-cutting under a joint management with China’s Geely, its chief executive officer said, according to Reuters.

It would mark the company’s first annual profit since Zhejiang Geely Holding Group, owner of Volvo Cars, bought a 49.9-per cent stake in the loss-making company in 2017, injecting cash and new technology to help Proton’s turnaround.

“I think this year we could make a profit. Financial performance has improved a lot,” said Li Chunrong, who has been Proton’s CEO since Geely’s acquisition.

Founded in 1983, Proton has reported losses for years and had resorted to state aid for survival, hit by intensifying competition from Japanese rivals such as Toyota’s Daihatsu brand and Honda.

Proton reported a net loss of $115 million in its financial year that ended in March 2019, according to local conglomerate DRB-HICOM, which owns the remaining stake at Proton.

However, the 2017 deal with Geely, which also has a stake in Daimler, helped it win back customers.

Malaysia’s Proton Sees End Of The Road Of Losses
The new Proton X70 SUV proved popular

Proton launched five new models over the past year including the popular X70 sport utility vehicle which is based on Geely’s Boyue, and saved around $60 million in costs, Li said.

Geely and Proton have invested over $288 million to expand and upgrade Proton’s car manufacturing facilities, Geely said in a statement. The company is nearing its target of selling 93,000 cars this year, up around 54 per cent from last year. Li said Proton is likely to set a 2020 target of a 30-per cent rise in vehicle sales.

Proton wants to claim the top position in Malaysia by 2027 and become a top-three player in Southeast Asia where it currently ranks only ninth, as it looks to export to key markets of Thailand and Indonesia. Other important export markets are Egypt and Pakistan, Li noted.

However, there is still a long way to go. For Proton, the best export performance was in 2005, when it exported 20,000, but the number dropped to 200 in 2017. For the time being, the new export target is 5,000 cars a year, Li said.

Proton's compact hatchback Suprima by Italdesign (model discontinued in 2019) Malaysian car maker Proton would return to profit this year after years of losses, driven by new product launches and aggressive cost-cutting under a joint management with China’s Geely, its chief executive officer said, according to Reuters. It would mark the company’s first annual profit since Zhejiang Geely Holding Group, owner of Volvo Cars, bought a 49.9-per cent stake in the loss-making company in 2017, injecting cash and new technology to help Proton’s turnaround. “I think this year we could make a profit. Financial performance has improved a lot,” said...

Malaysia's Proton Sees End Of The Road Of Losses
Proton’s compact hatchback Suprima by Italdesign (model discontinued in 2019)

Malaysian car maker Proton would return to profit this year after years of losses, driven by new product launches and aggressive cost-cutting under a joint management with China’s Geely, its chief executive officer said, according to Reuters.

It would mark the company’s first annual profit since Zhejiang Geely Holding Group, owner of Volvo Cars, bought a 49.9-per cent stake in the loss-making company in 2017, injecting cash and new technology to help Proton’s turnaround.

“I think this year we could make a profit. Financial performance has improved a lot,” said Li Chunrong, who has been Proton’s CEO since Geely’s acquisition.

Founded in 1983, Proton has reported losses for years and had resorted to state aid for survival, hit by intensifying competition from Japanese rivals such as Toyota’s Daihatsu brand and Honda.

Proton reported a net loss of $115 million in its financial year that ended in March 2019, according to local conglomerate DRB-HICOM, which owns the remaining stake at Proton.

However, the 2017 deal with Geely, which also has a stake in Daimler, helped it win back customers.

Malaysia’s Proton Sees End Of The Road Of Losses
The new Proton X70 SUV proved popular

Proton launched five new models over the past year including the popular X70 sport utility vehicle which is based on Geely’s Boyue, and saved around $60 million in costs, Li said.

Geely and Proton have invested over $288 million to expand and upgrade Proton’s car manufacturing facilities, Geely said in a statement. The company is nearing its target of selling 93,000 cars this year, up around 54 per cent from last year. Li said Proton is likely to set a 2020 target of a 30-per cent rise in vehicle sales.

Proton wants to claim the top position in Malaysia by 2027 and become a top-three player in Southeast Asia where it currently ranks only ninth, as it looks to export to key markets of Thailand and Indonesia. Other important export markets are Egypt and Pakistan, Li noted.

However, there is still a long way to go. For Proton, the best export performance was in 2005, when it exported 20,000, but the number dropped to 200 in 2017. For the time being, the new export target is 5,000 cars a year, Li said.

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