Kuala Lumpur. "Proton Edar Dealers Association Malaysia (PEDA) extend our network's support to DRB-HICOM  and congratulate the conglomerate for winning the bid to acquire Khazanah Nasional's 42.7% stake in PROTON Holdings", said President Armin Baniaz Pahamin

The dealer's network look forward to working closer with the new owner and understand the need for PROTON to have fresh capital injection to be competitive especially nearing the liberalization of auto market. Unlike our rival, whose vehicle make and model has achieved its economics of scale in its homeland abroad before being introduced in Malaysia, PROTON's bread-winner is in our homeland Malaysia. PROTON's volume with its own-born model in Malaysia's small population could not attained a sizable economies of scale.

1. DRB_HICOM as a new owner with a stronger cashflow would enable PROTON to introduce newer models more regularly and to be more aggressive in export. PROTON current financial capability can only allow one model to be introduced annually and once introduced, the model stayed in the market longer than that of the competitor to re-gained its return on investment.

Given the need for fresh capital injection via a new ownership is inevitable, PEDA supports DRB_HICOM take-over that will only strengthened PROTON financially. However, PEDA being the official representative for the authorised sales and service network in Malaysia that governs more than 80% of total PROTON domestic sales is concern for the welfare of our network.

2. There should be a continuity in policies and strategic direction. The dealers had gone through various policy changes from the first owner of PROTON to the current. The dealers have been with 7 (including acting CEO) Chief Executive Officers of Proton Edar Sdn Bhd. With every change in management, some of past failed policy was re-adopted and failed again while some good policies were terminated which left the network wounded.

3. The current management of PROTON under the stewardship of Managing Director Dato Seri Syed Zainal Abidin Syed Tahir inherited PROTON the year PROTON lost its crown as Malaysia number 1, top-selling national car maker in 2006 and inherited a legacy of critical issues from unsold stocks, poor quality, failed marketing and negative public acceptance. PROTON quality now is at par if not better than its competitors with a healthy unsold stocks.

4. Syed Zainal's team is more customer-sensitive as opposed to the production-led sales under the previous management that had left PROTON with historic critical level of ex-stocks exceeding 50,000 units of mix model and variance when previous management simply produced and forced dealers to sell against market demand.

5. There are now a higher standard of homogenous-quality of cars delivered to customers as opposed to previous when cars were delivered with dents, scratches, missing tools and accessories. All pre-delivery inspections were conducted centrally and vehicles of sub-standard were rejected and rectified first before being delivered to customers.

6. The sales network was rationalized from previously two with EON and PESB to only one sales network. There were an over-congestion of dealers network with a ridiculous 405 showrooms in a deteriorating market share versus our main rival's 182 centres selling higher number of cars per annum. PROTON Dealers suffered drastically from bad management decision to unnecessarily double up the number of dealers in the network. Dealers were not able to break-even for 6 years with too many dealers sharing a small piece of cake

7. The Dealers too had gone through the worst triumph with unfair competition against the in-flood of under-declared imported cars and three major economic recessions.

 8. PEDA trust the management of DRB-HICOM would be sensitive to the historical support extended by the dealer's network to PROTON and would move forward without any detrimental policy introduced to the dealers.

9. The year 2012 will be a more challenging year with Banks tightening the approval rate for PROTON customers. Currently, our dealer's network are facing a serious rejection rate of more than 70% with most Bank Managers refuse to accept any submission from customers without an average income of RM1,800 and above. Recently, even a fresh graduate with monthly income of RM2,000 was requested to submit a guarantor.

10. The implementation and enforcement of the amended Hire Purchase Act had also affected our sales. Proton buyers are facing major difficulty in disposing their existing cars to purchase a new PROTON.

11. With Banks revising to a stricter credit scoring for hire-purchase loan approval and the Hire Purchase Act amendments being fully enforce, any launching of new cars that the dealers are banking our sales for this year, will also be affected.

12. PEDA view the overall PROTON sales for the year 2012 as being tougher and could not afford any discontinuation of internal policy especially those that will directly affect the dealers.

For more information, contact