PROTON TAKE-OVER ATTEMPT..... again?

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Proton for sale!! ....is an old news that was even capitalise by the opposition during the last general election. Everybody seems so eager to sell Proton and the public too seems receptive to the idea.

Thusfar, we have heard international automotive giant volkswagen, Mitsubishi amongst others whom are keen to buy Proton. Locally, the Al Bukhary Group, NAZA group are amongst the never ending giant that has been attempting to buy over Proton.

Yesterday, there was another Saga unfolded by Pasquale... another attempt or re-attempt to take-over Proton....... again.. by 2 giants. A collaboration by Yasmin Holdings and Naza Holdings led by Proton pioneer Dato Kisai Rahmat and an attempt or re-attemp rather by The Al Bukhary group to buy majorityProton shares from Khazanah.

According to the source, Dato Kisai is said to have obtained 'blessing' from Tun Mahathir whom was quoted as unhappy with how the automotive giant is being managed. This I can confirmed to be UNTRUE. A reliable source told me Tun Mahathir had diplomatically rejected both attempt; Kisai & Al Bukhary.

"The take-over is an attempt to salvage the good name of Proton and to revive Proton from the current management said to be a bunch of hypocrites with no balls." see: pasquale and rocky's bru for further details.

Since Tengku Mahaleel's tenure as the Proton Managing Director... Dato Syed Zainal Abidin's authority as the Managing Director vested by the Board was drastically reduced.. to a point of being 'power-less' with most decision to be made by the Board. Perhaps if Dato Syed Zainal is empowered with more authority, then the 'hypocrite with no balls' statement is applicable. Nonetheless, problems faced by Proton management now is not created by the current management but it was an inherited legacy.. the left-over from Proton's previous management when Dato Kisai too was a Director.

Since his appointment, Dato Syed Zainal & his team had successfully sold the close to 50,000 Proton ex-stocks that was the most critical problem faced by Proton then. The new management had also successfully improved the quality of cars... we seldom hear anymore complains on defective parts, component or even poor quality. The sales demographic ratio from previously malay dominated, now comprise of a good mixture of malay and chinese car buyers... to say the least.

If Proton is as bad as the ugly picture painted.. then why would there be so many interested buyers of Proton? for national service and the good name of Malaysia? ..... I dont think so..!!

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Scrap Policy Scrapped by December 2009

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Today's New Straits Times reported the RM5,000 rebate provided under the 2nd Financial Stimulus RM60billion budget will be withdrawn in 5 months time (See: NST).

The government allocated RM60billion under the 2nd financial stimulus with the objective of stimulating the current economic downturn. The budget for automotive industry was only 0.3% from the RM60billion or RM200m allocated to the automotive development fund (see: MOF). The budget for the scrapping policy is part of the RM200million allocated. Todate, the disbursement or utilisation of the RM200m is unknown.

1. The scrapping policy was introduced as a short-term measure to sustain (without further deterioration), improve and even stimulate the automotive sales during this recession. The scrapping policy did not fully achieve the desired objective.

2. The scrapping policy is beneficial to build resilience to the automotive industry in the long run and not as an immediate stimulus. The current automotive industry with an already 2 car per household will soon affect the overall future car sales when the market is more stagnant without older cars being scrapped. Even todate, there are already an excess supply of second hand car in the market.

3. There were many scrap car applications that did not qualify under the Proton minimum car condition for scrapping, signalling a critical condition of vehicles being driven on Malaysian road (See: Proton scrap terms, Perodua Scrap). If these 10 year old car that is not-road-worthy is not mitigated, it will endanger other road users.

4. The scrapping of 10 year old cars is a good policy but not with an immediate result. The government should continue the scrapping policy for long term benefit (perhaps under a different budget). When the policy was introduced, the public took awhile to digest and understand the new policy but slowly there are demand for the public to scrap their old.

5. Without the scrapping policy, there should be more fund available from the RM200million budget allocated under the 2nd financial stimulus to be utilise for other better immediate measure to stimulate the automotive sale.

6. Before the government introduced the scrapping policy, Proton had already launched the Exchange Programme (similar to the scrapping policy). Now, Proton will probably continue the Exchange programme for selected models similar to the original program.

7. There are other external factors that may mitigate the success of the scrapping policy such as no infrastructure for scrapping when the policy was introduced. UEM, the appointed company to scrapped the vehicles were only collecting the scrap cars without scrapping them. Even now, the scrapping stockyard and all Proton showroom are flooded with old cars awaiting the pick-up for scrapping.

8. Without the car being scrapped, JPJ will not de-list the scrap car from registration. The government will only issue rebate payment upon JPJ de-listing the scrapped cars. Further aggressive campaign will probably affect both Proton and Perodua cashflow.

9. The scrap metal price was at the highest when the scrapping policy was introduced but now, the scrap metal price has drastically reduced probably signalling a short-term adverse viability to pursue the scrapping policy or for UEM to scrap the cars.

10. The objective of the scrapping policy should be re-looked and not limited as an immediate measure to stimulate the automotive sales. The safety of the other road user that may be affected by the not-road-worthy old cars and environmental friendliness should part of the scrapping policy objective.

11. To ensure a long term success, the scrapping policy should be driven by an independent organisation at the behest of the government, rather than being driven by Proton or Perodua with commercial but not the public's interest at large.


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The Chronicle of Malaysian Automotive Industry

The Chronicle of Malaysian Automotive Industry

I was first exposed to the automotive industry during my tenure with the Commerce International Merchant Bankers Berhad (CIMB) in 1995. I was in Corporate Finance and had to write various sectoral studies amongst thick full of other documentations for submissions to the Securities Commission for various companies undertaking mergers & acquisition and IPOs. Those companies in my portfolio were mostly in automotive... probably the reason being why i am still passionate about the automotive industry 15 years later.

I summarised as follows the evolution of the automotive industry in Malaysia that will probably answer various public critics (in cyber space or the media) in my call to de-regulate the hire-purchase commission, de-regulate the fix motor tariff as well as the establishment of an AUTOMOTIVE COUNCIL as the custodian to the automotive eco-system.

The automotive eco system should be defined as all relevant sectors that is instrumental to the the stability of the automotive industry, such as the automotive manufacturers, assemblers, suppliers, vendors, distributors, dealers, banking institutions and insurance institutions.

The Chronicle

1963- Malaysia began to encourage the establishment of the automotive industry based on recommendations of the Colombo Plan

1964- Policy of encouraging the assembly of automobiles and the manufacture of components parts was announced

1967- Government approved the operation of six (6) assembly plants mainly joint venture projects between European automobile manufacturers and local partners

1982- Cabinet approved the National Car project

1983- Heavy Industry Corporation of Malaysia (HICOM) signed an agreement with Mitsubishi Corporation to manufacture Malaysia national car

1984- Launch of National Car Project- Perusahaan Otomobil Nasional (Proton) to increase level of technology and develoment of intellectual property in the automotive industry. In line with the national car project, Malaysia Ministry of International Trade and Industry (MITI) determine the Nett Selling Price (NSP) of BOTH national and foreign cars.

1985- Production of 1st national car Proton Saga began. MITI approved the NSP taking into consideration various factors including the income (1) received from previously Hire-Purchase Commission (now replaced by Handling Fees) paid by banks to the car distributors and dealers as the intermediary between the customers and banks; (2) insurance commission received (Insurance agent commission was 25% of premium paid. The participation of Bank & financial institutions and Insurance companies supported and ensure the viability of the newly-born national car project.

1992- Perusahaan Otomobil kedua (PERODUA) was established primarily to complement Proton and expand local automotive product range (supplying smaller and more affordable vehicles) as well as support the vendor for component and parts manufacturing.

Both Proton and Perodua are now in direct competition in the same market segment and had driftered away from the objectives of the 1st and 2nd national car project.

1996- The Insurance Act 1966 superceded the Insurance Act 1963. Agency commission is now revised to a fix 10%.

The support by via the insurance agency commission that determined the low NSP for the national car project was ignored.

1997- Hire-puchase commission and additional incentives for salesmen paid by banks were abused and offered for all car make & models (not restricted to proton).

2000- Bank Negara Malaysia revoked the hire-puchase commission after being proposed by the association of finance companies/Banks. Bank Negara Malaysia introduced handling fees with effect from 13 July 2000 after various appealed by PEDA, EDAM and PDA. The handling fees is regulated with a maximum ceiling.

The hire-purchased commission was revoked without any reference to the NSP that was kept low (by MITI) to ensure the viability of the national car project. In year 2000- the NSP was still determined by MITI.

2003- MITI no longer determined the NSP and only acknowledge and monitors the price set by the car manufacturers. The Policy change was to aid liberalisatoin and development of the automotive industry in Malaysia.

2004- Influx and abused of Authorised Permits (APs) and under-declared imported cars. Malaysian public was cheated of billions in taxes and import duties. There were many duplications of resources from the under-utilised assembly to manufacturing plants (approved by MITI).

This had drastically and substantially affected the national car project project.

2005- Announcement and launching of the Malaysia National Automotive Policy.

The NAP was constructed and launched by the previous 4th floor (was not even launched by any Minister), with negligible consultation with any stakeholders in the automotive eco-system.

2009- Proposal by PIAM and approved by Bank Negara Malaysia for Motor Insurance mandatory direct commission rebate to customers.

If the move was proposed and approved for the benefits of Malaysians then PIAM and Bank Negara should de-regulate the current tariff instead. Malaysia will benefit better from a de-tariff or variable tariff similar to other neighbouring and developed countries. Currently, low risk customer such as female car owners are being discriminated and are paying hefty premium similar to the high risk customers.

Sadly, there is no 'Driver' and/or custodian for the automotive eco system although the automotive industry was earmarked to boost the industrialization process to enable Malaysia to be a developed nation by the year 2020 (Ref: here).

Bank Negara Malaysia, Ministry of Finance, Ministry of International Trade & Industry, PIAM (General Insurance Association of Malaysia), Association of Banks, Ministry of Domestic Trade and Consumer Affiar have all proposed, implemented, revised and introduced policies and instructions that will be instrumental to the downfall of automotive industry and its eco system in Malaysia. Without a custodian or a statutory body to drive and spearhead the automotive in Malaysia, there will be more adverse policies being introduced by different Ministries and statutory bodies.

The national car project, the automotive industry as well as various government policies introduced, must be rationalise, consolidate and review under a statutory body, the proposed MALAYSIAN AUTOMOTIVE COUNCIL. A rationalisation of the many automotive assembly and manufacturing plants and a more structured eco system could provide better stability to the automotive industry.

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BANK NEGARA INTEREST REVIEW ONLY BENEFITS THE BANK

PROTON EDAR DEALERS ASSOCIATION MALAYSIA

Press Release

“INTEREST RATE REDUCTION WILL ONLY BENEFIT BANKS”.

JANUARY 2009, KUALA LUMPUR. The downward revision in the Bank’s lending and base financing rates will have negligible effect on Proton car sales” said Armin Baniaz Pahamin, Acting President, Proton Edar Dealers Association Malaysia.

1. Currently, the interest rate for Proton car remained at 3.88% for hire-purchase loan duration of 7 years or less and 3.99% for hire-purchase loan duration of 8 and 9 years.

2. The interest rate has remained constant and there is no downward adjustment for Proton car interest rates even after the last revision by Bank Negara in November 2008.

3. In the latest revision by Bank Negara, it is doubtful that any interest rate adjustment to be made to new proton cars and on the bank facilities subscribed by Proton dealers.

4. Similarly, there is no interest rate adjustment even on Bank facilities subscribed by Proton Edar dealers (with most banks) during last November Bank Negara revision.

5. The interest rate for banking facilities offered to proton dealers by most banks is on a fix interest rate on daily and period-rest. Only a few facilities (by one or two banks) interest rate are fixed based on Base Lending Rate (BLR).

6. The interest rate reduction is an additional profit to Banks perhaps as a support for the anticipated losses during this recession year with negligible benefits to the dealers or the customers.

7. The public or car buyers do not benefit from the November interest revision nor does majority of Proton dealers.

8. The Public or potential proton buyer are still facing difficulty with securing hire-purchase loan to buy new proton cars given the high risk profile programmed for proton customers.

9. To improve the customers risk profile that is based on overall proton historical sales, the NPL for Proton brand name should be in a different category for new Proton car sales by Proton AUTHORISED DEALERS and different classification for ‘new-and-used-proton’ car sales by USED CAR DEALERS. Then the NPL will be more accurate and customer’s loan approval can be improved.

10. Government should only allow Proton authorized dealers to submit for new proton hire-purchase loan submission to Banks to mitigate unnecessary fraud, CBT and NPL (by unauthorized dealers). Currently any dealer can submit to the bank direct.

11. Unauthorized car dealer Hire purchase loan submission for new Proton cars contributes to a higher NPL. Authorized proton dealers had to comply with strict requirement by Proton and will not jeopardize their dealership for any fraud or syndicated buyers.

12. Factors that will spur the automotive industry include a more flexible and cheaper banking facilities, flexible loan duration, easier loan approval and a regulated pricing for second hand cars.

13. The public are heavily burden when the value of their existing car is less than the balance loan amount of the said car. This will further hamper the growth of the automotive sales.

14. 9 out of 10 customers would want to trade-in their existing car to buy a new car, but many are not able to trade-in their car, because the car value is lower than the balance loan amount. The value of second-hand or registered used cars car depends entirely on the banks prerogative on the financing amount.

DATO NADZMI SALLEH- PROTON CHAIRMAN

DATO NADZMI MOHD SALLEH- PROTON CHAIRMAN

I am 12 years old… my age as a Proton dealer. It has been 12 years since I run my Proton dealership. I have been a member of the Proton Edar Dealers Association Malaysia (PEDA) since inception and was elected Deputy President for the past few terms. I was the 76th dealer that was appointed previously under USPD (or now known as Proton Edar) in 1997. The total dealer’s network idiotically grew to more than 400 dealers and now reduced to less than 300 and still decreasing.

I received an email from PEDA President as I was still recovering from the new year late night celebration notifying the committee members of his leave from the President’s office. PEDA President who operated his dealership for the past 14 years had surrendered his dealership and is taking leave as the president. Business cycle for Proton dealers has never been easy. Never since the 1998 recession… and now, we are faced with another recession. We swam through unfair competition of under-declared imported cars and public criticism against Proton but most detrimental effect was the internal policy introduced and implemented by past Proton management themselves unto the dealers: The appointment-spree of hundreds of dealers to chronies in a deteriorating market share and in the absence of sellable variance to excite the market. More than 100 additional dealers were appointed by Tengku Mahaleel management in anticipation of terminating EON. A political move that destroyed the dealers network and PEDA President became one of the 100s of casualties thusfar.

Under the PEDA constitution, the President post is left vacant when the dealership was surrendered and the deputy president will resume as the Acting President. I led my 15 committee members as the Acting President to officially meet the Proton new Chairman Yg Bhg Dato Nadzmi Salleh yesterday.

The meeting with Proton Chairman was at his request. We eagerly await the Chairman arrival at the Proton Board room while chatting Proton MD Dato Syed Zainal Abidin, Proton Edar CEO En Shukor Ibrahim and Proton Edar General Manager Sidik Abdul Hamid. Dato Nadzmi enters the Board room with his usual enthusiast. We saw immediately the passion of an entrepreneur at the driver’s seat.

In my opening speech to the Chairman, I conveyed my awkwardness in being the spokesman as PEDA Acting President which was inevitable when the President had ceased to be a dealer. I reiterate, the president as one of the hundreds of casualties of Proton incompetent policy as earlier mentioned. PEDA is duty bound by constitution to our members and advocate strongly for nurturing and rehabilitating the dealers as opposed to any downsizing.

Although I could not disclosed the details of the meeting, I mentioned as my closing statement, in my 12 years tenure as a Proton dealer as well as a member and now Acting President of PEDA, Dato Nadzmi is the first and ONLY Chairman that called upon PEDA, EDAM within less than a month of being appointed as Proton Chairman. This is also the first meeting in the history of PEDA that was chaired by Proton Chairman with the attendance of Proton Managing Director, Proton Edar Chief Executive Officer and General manager simultaneously.

PEDA has a good working relationship and has always been in constant regular discussion with Proton MD and Proton Edar CEO. Dato Nadzmi pro-active initiative and approach to understand issue pertaining to the network signals a fresh and energize start for the New Year and in anticipation of the recession.

This meeting attended by the prime movers of Proton, Dato Nadzmi (Proton Chairman), Dato Syed Zainal Abidin (Proton MD), Shukor Ibrahim (PESB CEO), Sidik Abdul Hamid (PESB GM) and PEDA full committee is also a signal of GREAT TEAMWORK to weather ahead of recession. This show of solidarity will strengthen Proton to re-gained its market share and become the industry leader.

There is only one mission from the great teamwork… the public. Without the recognition from the public, we will still fail. The teamwork mission now is to give Proton sense of belonging back to the public. The public is indeed our one and only employer.

BIROKRASI PENTADBIRAN DI JABATAN KERAJAAN PUNCA KOS TINGGI PENYENGGARAAN PROTON PERDANA

PERSATUAN PENGEDAR PENGEDAR PROTON EDAR MALAYSIA

SIARAN AKHBAR

"BIROKRASI PENTADBIRAN DI JABATAN KERAJAAN PUNCA KOS TINGGI PENYENGGARAAN PROTON PERDANA "

 

Kuala Lumpur , "Kerajaan Pusat dan Negeri seharusnya menghapuskan birokrasi pentadbiran bagi  pendaftaran wakil Pusat Servis Kereta Proton Edar bagi mempertingkatkan day saingan", kata Armin Baniaz Pahamin, Timbalan President , Persatuan Pengedar Proton Edar Malaysia.

 

Sehingga hari ini,  cuma wakil pusat servis  Proton Edar yang  berdaftar dan  diluluskan oleh kerajaan   sahaja dibenarkan menjalankan  kerja-kerja penyenggaraan kereta Proton milik kerajaan pusat dan negeri. Ianya menyebabkan kerajaan Negeri dan Pusat tidak mempunyai banyak pilihan untuk  menghantar kenderaan kerajaan ke wakil-wakil pusat servis Proton Edar  yang lain  bagi  kerja penyenggaraan.  Langkah berkenaan mampu mengakibatkan harga kos penyenggaraan yang amat tinggi dan tidak terkawal dikenakan oleh pemilik wakil pusat servis Proton Edar yang berdaftar dan diluluskan kerajaan. Ini kerana hanya ada sedikit sahaja wakil pusat servis yand berdaftar dengan kerajaan berbandingkan dengan jumlah keseluruhan wakil-wakil pusat servis Proton Edar di Malaysia. Apabila tiada pilihan, akan lahirlah budaya sogokan atau kenaikan harga yang tidak terkawal.

 

Tanpa birokrasi pentadbiran pendaftaran bengkel di Jabatan Kerajaan,  kerajaan negeri dan pusat boleh mendapatkan kerja-kerja penyenggaraan dari lebih 300 bengkel Proton Edar dan Eon dengan  harga yang lebih berpatutan di seluruh Malaysia.

 

Proses perlantikan bengkel berdaftar Proton Edar adalah sangat ketat dan sentiasa dipantau bagi memastikan kualiti kerja dan pengendalian yang baik. Dengan itu,  bengkel berdaftar Proton Edar seharusnya di kecualikan dari segala pendaftaran di Jabatan Kerajaan bagi kerja-kerja penyenggaraan kereta Proton sama ada ianya masih  didalam waranti atau telah tamat tempoh waranti.  Saingan di antara 300 bengkel berdaftar Proton Edar  bagi kerja-kerja penyenggaraan kereta milik kerajaan  dapat bantu membanteras  harga kos yang amat  tinggi oleh pemilik bengkel yang tidak bertanggung jawab.

 

Kenyataan dari tiga kerajaan negeri , Terengganu, Perak dan Pulau Pinang, mendedahkan harga penyenggaraan yang tinggi, merosakan reputasi kereta Proton dan membebankan wakil jualan dan servis Proton sedangkan kita sebagai pengusaha pengusaha wakil Pusat servis Proton Edar memang yakin harga kos penyenggaraan bagi kereta Proton Perdana  adalah berpatutan dan tidak setinggi seperti yang dimaklumkan oleh kerajaan kerajaan Negeri.

Kebanyakkan kereta Proton yang berada di pasaran mempunyai lanjutan waranti melebihi 5 tahun.  Kos  bagi kerja penyenggaraan   biasa  kereta Proton adalah dari harga RM200 sehingga ke RM500 setahun tertakluk kepada penggunaan dan tingkah laku pemanduan kereta.

Lebih dari 60,000 unit Proton Perdana telah dijual sejak ianya berada di pasaran dan sehingga kini lebih kurang 10,000 unit Proton Perdana dijual setahun.  Kereta itu laris di pasaran kerana harga kereta dan kos penyenggaraan yang berpatutan.

Dengan adanya birokrasi pendaftaran di Jabatan Kerajaan bagi pemilik bengkel terutama wakil pusat servis Proton Edar membataskan  bengkel yang cekap dari menyenggara dan memberi sebut harga yang lebih rendah dan berpatutan untuk kenderaan kerajaan.  Pendaftaran wakil Pusat servis Proton Edar Yang memang dibawah naungan Kerajaan di Jabatan-jabatan Kerajaan adalah tidak berfaedah kepada mana-mana pihak dan hanya menggalakaan budaya sogokan, kata Armin.  Kita seharusnya bersama memikirkan langkah-langkah  membanteras masalah ini dengan menghapuskan pentadbiran birokrasi yang telah terbukti di 3 negeri kehadiran budaya sogokan dan tidak kompeten.

 

“GOVERNMENT RED-TAPES ARE THE CAUSE OF PROTON PERDANA HIGH COST OF MAINTENANCE”

 

PROTON EDAR DEALERS ASSOCIATION MALAYSIA

Press Release

 

“GOVERNMENT RED-TAPES ARE THE CAUSE OF PROTON PERDANA HIGH COST OF MAINTENANCE”

 

KUALA LUMPUR. “State and federal government should eradicate the red-tape for the registration of Proton Edar authorized workshop to ensure competitiveness” Said Armin Baniaz Pahamin, Deputy President, Proton Edar Dealers Association Malaysia.

 

Currently, only the government-registered Proton Edar authorized workshops are allowed to service and maintain state and federal government vehicles which limits the option for the state and federal government to send their vehicles for servicing. This practice will also lead to corruption and exorbitant cost of maintenance charged by the registered workshop since there are less workshop as an alternative option.

 

Without the red-tapes of state and federal government registered workshop, the State or Federal government can obtained the best and most competitive quote from more than 300 authorised Proton Edar and Eon service dealers network in Malaysia.

 

The appointments of Proton Edar authorized workshop are very stringent and are regularly assessed for competencies and quality control. As such, Proton Edar authorized workshop should be exempted from any registration to service Proton vehicles under warranty or after warranty for the Government. The competition between the 300 authorised dealers to service government vehicles will eradicate any unscrupulous and unnecessary high cost charges.

 

“It is very damaging for Proton dealers when three state governments, Terengganu, Perak and Penang, exposed a high cost of maintenance for Proton Perdana, especially when we, the authorized Proton workshop operator know for a fact that the cost of maintenance for Proton Perdana is not as exorbitant”.

 

Most of the Proton cars sold now are with a total of 5 years extended warranty. The cost of regular maintenance for proton cars ranges between RM200 to a maximum of RM500 per scheduled service depending on which models.

 

A new Proton Perdana bought in 2004 was manufacturer’s warranted for 2 years. A new Proton Perdana that is purchased now is with an option for extended warranty for a total of 5 years. With a 5 years extended warranty, Proton Perdana annual maintenance cost is less than RM500 per annum depending on the usage and driving behavior.

 

More than 60,000 Proton Perdana has been sold since it was launched and is still selling an approximate 10,000 units of Perdana per annum. The car is saleable because of the competitive pricing as well as the reasonable cost of maintenance.

 

Having workshop to be registered with the Government, especially Proton Edar authorized workshop will limit the available competent workshop to quote and service government cars for a cheaper price. Unnecessary registration and red-tapes will also open the floodgate for corruption, added Armin. We should eradicate the source of the problem rather than pin-pointing an already proven corrupted and incompetent system.

COLOUR BLIND MALAYSIA

COLOUR BLIND MALAYSIAN-

We walked to the nearest Mamak restaurant from the commissioner of oath office at Desa Pandan. We sat as we ordered Nescafe tarik. This was at least my 7th glass of Nescafe tarik today. I lit my cigarette, lean against the white pillar next to our table as I listen to Jay. Jay, an indian lawyer, began by voicing his distress at how members of parliament, politicizes racial sentiment. It is despicable to hear the non-bumiputra questioning the NEP and the bumiputra themselves claiming they will not survive without the NEP. The political party had successfully created racial distress from the non-affected Malaysia citizens.

The concept of NEP never took place in the appointment of Proton Edar (or formerly known as USPD) dealers. The appointments of Proton Edar dealers were never for the Malays nor were there any percentage of Malay dealers being maintained at all time. Proton Edar dealers is probably the true picture of the Malaysia economy without any racial sentiment being politicized. I was in Corporate Finance with the Commerce International Merchant Banker back in 1997, when I first applied and appointed a Proton Edar dealer. Though I would like to believe that my appointment as Proton Edar dealer was on my own merit, having been with the team that was responsible for the corporate acquisition and restructuring of DRB-HICOM, I am sure there were many other qualified Malays. Despite my credibility being in Corporate Finance, Student Union President in a British University and being actively involved in NGOs, the truth is, I was appointed a Proton Edar dealer in 1997 because my dad was the Director General of the Road Transport Department or JPJ, I was 23 years old. The youngest dealer ever appointed.

This reiterates the economics of who-you-know or chronyism rather than the ‘what-you-know’. Whilst the economics of Chronyism may be instrumental to secure a proton dealership in the past, the ‘who-you-know’ or ‘what-race-you-are’ does not have any impact to any preferential treatment on the business well-being of a Proton dealer, irrespective whether you are a Malay, Chinese or Indian. There are many successful Bumiputra dealers and there were also many failed Chinese dealers. Prominent dealers under the late Tan Sri Megat Junid or even Dato Seri Chua Jui Meng irrespective of race ceased to be a dealer when they were still in power, when their business failed. The ‘who-you-are’, ‘who-you-know’ or the NEP does not guarantee the success of a Proton dealer. There was a healthy mix of Chinese, Malay and Indian proton dealers in the network.

The Malays were not appointed a Proton dealer because there were Malay under the NEP, nor were they successful because of any additional assistant rendered by Proton or the government (NEP). The non-bumiputra dealers did not fail because of extra assistant or facility granted to the malay. Even with the existence of the NEP, the rise and failure of a business lies in the COMMITMENT of each individual dealer irrespective of ‘who-you-are’, ‘what-you-are’ race and ‘who-you-know’ chronysim.

The current political outcry politicizes racial disharmony akin of saying the Chinese dealers has been marginalise because of bumiputra benefits that they (Chinese) were deprived. On the other hand, UMNO’s outburst on the Malay needs to be salvage with NEP or bumiputra rights is also unwarranted and unbecoming. These are all old political tricks to gain support.

Do not get conned into believing the political outcry in racial disharmony. Malaysia has progressed well without racial disharmony. To move forward, we must all be COLOUR BLIND and see Malaysia as Malaysian instead of Malay, Chinese or Indian.

THE CHIEF MINISTER WITH PROTON QUALITY..

Press Release

“AVERAGE MAINTENANCE COST FOR PROTON PERDANA IS LESS THAN RM500 PER ANNUM”.

KUALA LUMPUR. “Terengganu State Government expenditure in excess of RM1million for 16 units of Proton Perdana car maintenance between 2004 and 2008 was unjustified” Said Armin Baniaz Pahamin, Deputy President Proton Edar Dealers Association Malaysia.

A new Proton Perdana bought in 2004 was manufacturer’s warranted for 2 years. A new Proton Perdana that is purchased now is with an extended warranty for a total of 5 years. With a 5 years extended warranty, it is not possible for the maintenance of a new Mercedes E200 compressor to be cheaper than a new Proton Perdana.

Proton service dealer network had been servicing Proton Perdana since inception and had never charged any Proton Perdana more than RM500 average for a regular maintenance per annum depending on the mileage of the car.

To maintain the manufacturer’s warranty, Proton Perdana must be regularly serviced at a service frequency of every 5,000-10,000km. The cost for each servicing, as per Proton RECOMMENDED SERVICE ITEMS are only RM250 average per minor service. The average mileage for a car owner per annum is less than 10,000km and the cost to maintain the car of that mileage is less than RM500 per annum.

For high user with an average mileage of 30,000km per annum, the average cost of regular maintenance will be approximately RM1,500 per annum with an additional RM1,500 per annum for other wear and tear items such as tyres, brake pads, wiper blade, battery etc.

The replacement of the gearbox can be avoided with regular service maintenance. The cost of a new original Proton Perdana gearbox is approximately RM20,000 but the gearbox is under manufacturer’s warranty of up to 2 years or 50,000km mileage if the Perdana was purchased in 2004. Our new Perdana now is with an option of an Extended Warranty for a total of 5 years or 175,000km whichever is first.

Armin said, the Chief Minister, YB Datuk Ahmad Said should have validated, authenticated and investigated the exorbitant expenditure rather than concluding that the expenses is the real cost to maintain a Proton Perdana. It is naïve to even think that the maintenance for a Proton Perdana will be that costly.

We have sold more than 60,000 units of Proton Perdana since it was launched and is still selling an approximate 10,000 units of Perdana per annum. If the cost of maintenance is as exorbitant as what the Chief Minister claimed, nobody will buy the car. The car is saleable because of the competitive pricing as well as the reasonable cost of maintenance.

“We laud and welcome the ACA probe and investigation into the exorbitant cost of repair to clear the claim made against our Proton Perdana. The Chief Minister’s remark was naive, unbecoming and an insult as well as damaging to Proton especially when the real cost or the authenticity of the repair job was never ascertained. The chief Minister’s credibility is worse than the alleged poor quality of Perdana. His remark reflects his professionalism as a leader”, said Armin.

We urged the federal, state government and the public to also refer to the Proton owner’s manual booklet that is provided with every purchase of new Proton car for the replacement of recommended items for warranty purpose and to avoid being over-charged for replacement of unnecessary items.

PROTON, SuperCARS, SuperBIKES & SuperBICYCLES

1. Proton acquire 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.

2. Most of Proton customers and the public are aware of the branding LOTUS and have heard about the Lotus car. However from Proton network first-hand experience, less than 10% of Proton customers really understand the LOTUS DNA in proton cars except for the RM5 logo bearing “handling by Lotus” on Proton Cars which is the main selling point. Once you have driven a Lotus, then you will understand the meaning of Lotus handling but how many of Proton customer had ever driven a Lotus?

3. With the acquisition of Lotus, the public were told that the Lotus cars will be available at selected dealer showroom. Proton dealers were then told to upgrade their showroom and the dealers will be allowed to sell the Lotus as part of Proton varieties. There were no dealer that were allowed to displayed and sell the Lotus although some dealers had invested to upgrade their showrooms in anticipation of displaying and selling the Lotus.

4. Pursuant to the Lotus acquisition, Proton embarked in Proton bicycles and all the dealers were forced to sell Proton Bicycles. Proton Bicycle was a failure and many dealers bought the bicycle stocks for own use instead, to comply to Proton requirements.


5. In December 2004, Proton purchased a majority share in MV Agusta of Italy at 70 million Euro. MV Agusta is the manufacturer of MV Agusta, Husqvarna, and Cagiva motorcycles.

6. The Lotus cars were never displayed and sold at the Dealers showroom although some dealers had renovated and upgraded their showroom to sell the cars and the Proton Bicycle which ended up being a liability to dealers, it is safe to assume that Proton dealers will be selling the Proton Superbike with the MV AUGUSTA acquisition in 2004. Thank god it never materialised.

7. There are still a lot of complain on the quality of Proton Cars, even on the 20 years old saga before it was phased out and replaced. Rather than venturing and diversifying into supercars, superbikes and superbicycles that all have a very niche market, Proton resources should be channel towards meeting the need of the mass public such as quality, affordable range of cars without subsidy, grant or tax/custom excise waiver from the government.

8. However, buying the technologies in the Supercar Lotus, Superbike MV AUGUSTA and Superbicycle T-bikes is a business decision and I am sure the Advisor, Chairman and Board of Directors, the Managing Director of Proton (at the time the deal were signed) are aware of the business opportunities from these super-technologies. But once the Super-dealings have been concluded, to dispose-off the superdealings such as MV AUGUSTA for RM5 (or 1 EURO dollar) is insane and out of the mind.

9. Even if the new shareholder of Proton and its new Board and management are streamlining their products and services, selling their RM350m investment in MV Augusta for 1 Euro is absurd and ridiculous. The sales of MV Augusta for 1 EURO can only be agreed upon by either an incompetent advisor (CSFB or Proton Chairman & its board) or by some ‘interested party’.

10. The MV Augusta had proven to be a wise investment when part of MV Augusta, were sold for RM1.06 billion.

11. I support TDM’s and call for the Securities Commission, the ACA or any MPs to raise in Parliament, to investigate the transaction.

12. The public are concern with the quality of the cars as well as the future of Proton. These internal issues if not resolved, will affect the people working at the proton and its value chain. Their motivation will be affected by the alleged corruptions that will eventually affect Proton's quality, healthy production and sales.

Proton, Gas and the Government

The fuel price increased had attracted various opportunists for cheap publicity but it did not attract any effort by our Prime Minister or its cabinet Ministers to find means of overcoming the public’s burden in absorbing the price increase of most essential items except for the RM625 one-off subsidy for road tax rebate which cannot even pay for the increase in chicken price annually let alone the petrol price hike.

Amongst the many opportunists is our very own Proton whom made headline for its plan to fit the Waja, Saga and Persona with NGV (Natural Gas for Vehicles) kits by year-end. These NGV kits will be installed at the production level and will come with a warranty.

For the warranty to be extended with the NGV fitment, Proton Edar authorised workshops must be sanction to undertake the NGV service and repair. The mechanics and technician has to obtain special licence and the workshop must apply for special permit to service gas engine. The workshop also requires special tools for the service. Currently, none of Proton Edar service dealer network is authorised for NGV servicing or even aware of any administrative requirements to obtain the mechanic licensing or permit for the workshop. The process and procedures for the application may take longer than the expected year end for launching of Proton vehicles with the NGV kit installed. If these are not resolved, how do we expect the customers to be able to claim any warranty or servicing associated with the NGV vehicles.

But assuming the licensing and permit administrative procedures are complied with and in the absence of great thinkers in the Government or the ‘4th floor’, does Malaysia infrastructure is ready for gas? With Proton and other car manufacturer following Proton's moves for gas, soon there will be an influx of NGV vehicles.

To keep the electricity price low, the government during Tun Mahathir era did not allow gas price to be increased. The government decide the price of gas to be sold to power stations. Petronas sustained losses from the low gas price but not as much under Tun’s Government given the crude prices were only around US30 dollar per barrel then. Today, it is US139 dollars per barrel. The cost of gas, likewise had increased and the losses suffered by Petronas is much higher but then this is again for the Abdullah’s Government and Petronas to resolve. Hints.. gas price may increase soon too…

Petronas also supplies NGV for motor vehicles but the amount is limited because the sale of NGV incurs a big loss in profit to Petronas as there is no reimbursement by the Government. Other oil company refuse to sell gas as they would also lose money given the low gas price that was fix during Tun Dr Mahathir’s government, hence, if all car manufacturer start producing vehicles with NGV, the price of gas may be increased to make it attractive for Petronas and other oil company to provide gas at all the petrol stations.

Currently there are very limited petrol stations providing gas for vehicles which is mostly used by taxis. Once Proton began selling cars with NGV kits, consumers will be burden with limited source for petrol stations with gas supplies and may have to queue a few kilometres long with all the taxis to refuel their gas. Notice the queue at all petrol kiosk (such as the one near KLCC and kelana jaya) with gas supplies.

So really, does the NGV kit by Proton and other car manufacturer the answer for the public outcry due to petrol price hike? A proper planning preparing the authorised workshop dealers network for NGV vehicles service licensing, permits and training and an affordable price for the NGV kit alone will not ease the public burden. The Ministry of Domestic Trade & Consumers Affair has to ensure that all petrol stations are able to supply gas and more importantly, can Petronas sustain the loss in profit from the increase in sales of gas to the public, or will there be a gas price revision to attract other oil company to supply gas at their petrol stations for the convenient of the public. With the possible price revision, what will happen to proton vehicles with NGV fitment?

Unless the Government spearhead the gas as an alternative to cheaper fuel for cars, Proton and various other automotive manufacturers move towards NGV will just be another failure. But thumbs up to Syed Zainal and Proton as well as other car manufacturer for the effort to ease the public outcry.

Bernama News TV Interview

On Monday morning, I received a call from Laili Rahman, Broadcast journalist from Bernama News TV for an interview on my capacity as the Deputy President of the Proton Edar Dealers Association Malaysia to be aired this Saturday 21 June 2008 on Bernama News TV channel 502 Astro. I was asked to comment on the possible effect on Proton car sales due to the increase in petrol price. The interview was set on Tuesday and we had the interview yesterday but I am sure some of what was said will be censored.

The morning did not start too well with lots of screaming on my end when my Fasfik sales performance did not meet my half month target. I sat with all my Head of Departments and brainstormed on various measures to overcome the shortfall in our sales performance. I only had 30 minutes before the scheduled interview with Bernama and in temperament quickly conclude the brainstorming discussion when Laily arrived. I greeted the charming reporter and began our conversation with what other industry feels with all the price increase. Almost all industry extended a very negative view. The followings are the excerpts from the interview.

Laily Rahman: How do you see the sales performance of Proton's car after the announcement of new fuel prices?

Armin Baniaz: The fuel price increase will not have a major direct impact on Proton car sales as Proton is a people’s car. The bulk of Proton model variances ranges from 1.1, 1.3 to 1.6 cylinder capacity and are economical to use. The petrol price increase may instead improve the sales of Proton cars when the public then realise it is more economical to use Proton cars. For example, Proton Savvy was recorded in the Malaysia Book of Record for the best fuel consumption with 24km per litre.


Laily Rahman: You mentioned that it will not have a direct impact, is there an indirect impact?

Armin Baniaz: Yes indeed. The fuel price increase may affect the existing hire purchase loan repayment due to having less disposable income. The majority of proton customers are from the middle to lower income group and they usually (before the petrol price increase) do not have any extra disposable income. With the increase in the petrol price as well as the price of other essential commodities such as price of chicken, electric bills etc, they may realise then realise that they cannot afford to repay the car monthly repayment. This will increase the Bank’s Non-Performing Loan (NPL) and Banks may be more stringent with hire purchase loan approval that will eventually affect the sales of Proton cars.

With the increased in price of fuel, and the price of some essential expenditures such as electricity, water, even chicken etc.., the lower income earner that comprised of a large majority of the population who also purchased a car under hire-purchase loan usually can only meets end without any further savings or other disposable income. Any increase in essential expenditures, will be the opportunity cost to their current expenditure such as the monthly car repayment.

Laily Rahman: Will the petrol price increase effect the operation of Proton Dealers too?

Armin Baniaz: It should affect both Proton as well as the dealers, the cost of operation will be increased (especially the movement and the logistics of our stocks are cars). Currently, although Proton sales have picked up, but the dealers network is still far from profitable (due to the over-congestion of the dealers appointment). Proton dealers cost of operation is much lower than that of Proton’s own-branch. I can safely assume the dealer’s cost of operation is only approximately 30% of the Proton own-branches. Proton’s own-branches in the aggregate are selling less than double what the dealers are selling, hence there is no way Proton’s own branch are making profit (given the same profit margin as the dealers). It makes more sense for Proton to close some of their branches (rather than subsidising the lost incurred by their own branch) and convert their Platinum branches into a WARRANTY AND AFTER SALES CENTRE to further enhance and signal better confident in their cars to the customer.

For proton to cost-down operation and close their branches. All resources should be channel towards enforcing the neglected Proton IP rights and moulding every dealers towards similar goal without any biaseness to their own branch. The Dealers invested their money and is more sales, customer and profit oriented (being business owner). Nonetheless, the cost of maintaining the sales network will then be borne by the dealers.

Since the inception of Proton back in the 1980s, dealers margin were kept low to ensure long term survivability. However, the Government then under Tun Dr Mahathir, requested other sectors to assist the national carmaker but extending (similar to the developed nation) a ‘Hire-Purchase commission’. Hire purchase commission is a payment to proton dealers for marketing the packages offered by Banks and financial institutions. The hire-purchase commission accounted to 2/3 of our total margin. Profit margin per car was only 1/3. This Hire-Purchase Commission that was first extended ONLY to Proton dealers were open to all car dealers of other makes in the early 1990s and that was when I believe the benefits were abused. In the early 2000, the Central Bank revoked the hire purchase commission but later regulate and impose a ceiling. Proton dealers profit margin per car was never revised (when the hire purchase commission was revoke) though it was earlier kept low with the support of the hire-purchase commission. Todate, there were negligible revision of our profit margin though our rental has increased more than 60% since we commence operation and had spend almost RM1million in total for three times compliance to Proton Corporate Image since 1996.

With the increase in the operating cost such as Petrol, electricity etc… the dealers will incur more losses. All the increase in the operating cost are absorbed by the dealers.

Laily Rahman: Have PEDA written to the Authorities since this is of national interest?

Armin Baniaz: Yes we have. We have written twice to the Governor Bank Negara for the hire purchase commission with a detailed independant study by Ernst & Young benchmarking the dealer's responsibilties pertaining our roles as the agent to the bank and our remuneratoin (hire-purchase comminssion). The Benchmarking was done against developed and neighbouring countries like Singapore, Thailand, United Kingdom, Australia and japan. We have also written to the Prime Minister?

Laily Rahman: What was their response?

Armin Baniaz: there were no response whatsoever from either the Central Bank Negara Governor (or its officials) or the Prime Minister (or its office) and we will write again soon.

Laily Rahman: Do you have any forecast for the next 6 months.

Armin Baniaz: I do not have the overall forecast. Proton would be in a better position to forecast. However, currently most of the model variances are on waiting list!
But overall we expect a total of a minimum 13,000 deliveries per month or an equivalent to approximately 30 cars per dealer that is still not our break-even sales.


Laily Rahman: Do you have any suggestions to ensure sales remain good?

Yes, since automotive is neither the buyers market nor a sellers market but instead BANKER’S LED market, the government (ministry of finance/ bank Negara) should stimulate the automotive sector by allowing the public to restructure their hire purchase refinancing to ensure that the public disposable income that is now affected by the petrol price increase (as well as all other essential expenditure price increase) can afford to pay the monthly repayment. When the public can afford to pay the monthly payment for their cars (given the increase in price for essential expenditure), the bank’s NPL will be reduced and Proton customer risk profile will be adjusted.

PEDA understand that Proton’s customer were categorised as high risk due to fraud loan, big loan default rate or high NPL. But the major cause of the loan default rate, as well as the NPL was the syndication by unscrupulous brokers and sales man. There were previously no measures or supervision of the sales personnel appoinments. PEDA together with Proton had taken the necessary (via centralised registration of all salesman) step to eradicate this practice but if we want to wait for proton customer risk profile to be re-adjusted by the market then we will have to wait for another year or even a few years.

WITH GOVERNMENT ASSISTANCE, THE CUSTOMER RISK PROFILE CAN BE ADJUSTED NOW TO ENSURE THE CUSTOMER CAN STILL BUY PROTON CARS AND PERHAPS EXTENDING THE LOAN REPAYMENT FROM THE CURRENT 9 YEARS TO 12 YEARS TO REDUCE THE HIRE PURCHASE LOAN REPAYMENT AND MAKE IT MORE AFFORDABLE TO THE PUBLIC.

Having taken the necessary step to register all salesman in the network, the bank can rest assure fraud, default rate and NPL rate will be drastically reduced if not eradicated.
If the bank can adjust the customer risk profile now, than our sales can increased by at least 30% (via reducing the current 60% rejection rate due to customers with high risk profile and affordability if loan period is extended)

When PEDA did the ‘gulur tikar’ statement last year or two, our predicament was on the same basis. Yes the uncertainty pertaining to the foreign partner (eg Volkswagen) affected our sales because the pubic were waiting for the newer model line-up expected from the joint venture. BUT the main caused of the decline in sales were due to the Bank’s stringency (Customer RISK PROFILE) and the bank’s valuation of the second hand car in anticipation of the new ‘foreign model’.
SECONDLY, because of historical syndicate to falsify customers documents and the HIGH NPL, Proton customer’s risk profile are higher than other model makes. This will happen again NOW when customer simply cannot afford to pay their hire-purchase loan repayment due to less disposable income as a result from most essential expenditure price increase.


Laili Rahman: Have you heard any complaints/comments from customers regarding new fuel prices? What do you do to explain to them.

Armin Baniza: yes everyday… though the price increase is inevitable and beyond our control (as a citizen), we can mitigate the price increase through changing our driving behaviour, proper car maintenance as this will promote better fuel saving as well as restructuring our finances. For example, refinancing the car or change car to a more fuel saving car.. such as Proton Savvy// 24km per litre- recorded in the Malaysia Book of record. This is important as not only the fuel price is increased but everything from electric, water, chicken etc…. a short term measure is to ensure we can maintain our monthly disposable income.

Laili Rahman: Thank you Armin.

Syed Zainal Contract as PROTON MD should be renew or terminated...?

The main question we should ask, before getting all emotional in speculating the renewal of Dato Syed Zainal contract as the Managing Director of Proton, is what he did or is doing during his tenure that will expire end of this year?

To answer this question, we have to ask another question, what did he inherite when he accepted the post as the Managing Director of Proton.

I will avoid making statements that is not relevant to me as Proton Edar dealers and as the Deputy President of Proton Edar Dealers Association Malaysia.

I am of the opinion (personal opinion) as a dealer (since 11 years ago) long before Syed Zainal's appointment as the MD of proton, that the MD of Proton's main responsibility (in the eye of the sales dealer & the public since we are the front line interacting daily with the public) is to ensure prompt deliveries of Proton cars to the dealer and hence the customer. Secondly, the quality of cars that is delivered and finally, the profitability of the dealer's network.

Before Syed Zainal's tenure, Proton's ex-stock level was so high that even if Proton factory ceased to operate (without producing new cars), there will be a healthy flow of cars for at least 4 months. NOW, ex-stocks were liquidated and almost ALL Proton variance are on waiting list.

Before Syed Zainal's tenure, there were approximately 400 Proton Edar branches and authorised sales dealers network in Malaysia selling in total approximately 140,000 cars per annum. NOW, it has been rationalize to approximately 300 branches and authorised sales dealers. Of course, i am still angered and still pursuing meeting the Prime Minister, Deputy Prime Minister, Cabinet Minister, the government backbenchers and if need to, even meet the opposition political party for Proton to CLOSE their own branches (from selling Proton cars) and mould and groom their dealers who are pure entrepreneur to perform (hence, even a Ministry of Entrepreneur existed ONLY in Malaysia for the same reason) and in line with the second Industrial Masterplan for entrepreneur development. Why should the tax-payer pay to sustain lose-making Proton own branches for their Corporate Image sake. Proton Edar sales dealers, even without any customer relation training or salesman training, can take better care of the customer as it is their own business. (see my earlier blog-posting).

Before Syed Zainal's tenure, Proton manufacturer's warranty was only for 1 year or 2 years for some models. NOW, Proton manufacturing warranty is extended to a total of 5 years signalling confident of proton management on their own products.

Before Syed Zainal's tenure, customer will have to wait for a warranty claim and the onus to claim warranty falls on the customer. hence, customer has to ensure and prove that their car was properly serviced at proton authorised workshop etc etc.... NOW, Proton even have a "Proton iCare" department to handle and attend to any customer's complains from warranty claim to grouses of proton customer stuck in traffic jam.

Before Syed Zainal's tenure, there were no sales man tagging or registration hence inviting unscrupulous appointment of sales man that led to many syndicated or falsification of customer documents that eventually place proton customer profile at a higher risk than other brand cars. NOW, all sales man must be registered centralise and any irresponsible act of any salesman, will lead to the blacklisting of the respective sales man in the Proton Network.

Before Syed Zainal's appointment, Proton never seek dealers feedback or opinions on the launching of new proton cars when the last end of Proton value chain is actually the dealers. Certainly, Proton dealers who interacts daily with the public have some important comments to relay. NOW, dealers' feedback and comment are taken seriously and dealers are invited to participate in most discussions pertaining to the development and the launching of new model variance.

Before Syed Zainal's appoinment, khazanah, Proton Board of Directors all wanting to sell proton to a foreigner or the much speculated Volkswagen. As a Malaysian as well as a proton dealer, i am very proud to sell Proton cars and not a stupid re-badge Mitsubishi or re-badging of daihatsu into Perodua or Kia into NAZA. Indeed, Proton Waja, Gen 2, Savvy, persona, the new SAGA, soon to be launched MPV are all MALAYSIA PRODUCT. There is no pride in assembling cars and rebadge them to call it a Malaysian car. we are now in the new millenium, re-badging stories in the early 1980s... If we still looking at rebadging cars, then we will not move forward. I never agree with Volkswagen or foreign company taking control of Proton. The truth is, Khazanah or Proton wanted Volkswagen for their under-utilised Tanjung Malim plant. Even if Volkswagen is localised, the price of VW cars will still be above RM100k, and that wont help dealers selling extra cars. Both Proton & Perodua makes up the biggest market share because of car price variance below RM40,000. So why should the dealers be bothered whether the VW deals materialise or not. It is only to make full use of Proton's investment in Tanjung Malim. The economies of scale from VW committed production of 350,000 cars per annum by may provide some economies of scale to the Proton production and make Proton more profitable but what the dealer want is a more value for money car and better quality. It makes more economic sense to mass produce all Proton cars (not the re-badge VW of foreign cars) and target exponential sales for export market (hence, what Syed Zainal is doing now!). Nonethelesss, Proton already have Lotus for technology. Proton factory is one of the most hitech factory available worldwide (but way underutilised) and Proton has the biggest sales network domestically (if properly rationalize, Proton network can be the strongest network!). What we actually need is QUALITY CARS and AFFORDABLE pricing!!! Proton Iswara.. a 20 years old car, was still defective in many aspect, 20 years after it was launched. NOW, PROTON REMAIN A MALAYSIAN COMPANY and proton quality has improved drastically. Even the smallest or the slightest problem as per the Proton Savvy Re-call was for nothing BUT to maintain Proton's quality! The new SAGA and Persona are both affordable and evident from the 40,000 bookings still pending deliveries for each model.

These are factors that is evident and what we see (from dealers' & customer perspective) as effort by Syed Zainal and his team. For those who knew me, they will know that i always argue, debate and never blindly supports (especially previously with TIFLI, Teo Aeng Kyet, Tan Ghee Chow, Dato Donald Choo and Dato Razak Dawood, and now with SIDIK) BUT i strongly believe in Syed Zainal and his team's passion, enthusiasm and humbleness in making sure that Proton stay and remain profitable.

So, my verdict as one of the longest serving dealer (since USPD days) and the Deputy President of Proton Edar Dealers Association Malaysia, is a MUST for Syed Zainal's contract to be RENEW & EXTENDED. Though i have to say that i am still in strong debate with him to close Proton Edar's own-branch!!!! Without the branch, Proton may impose any requirement to increase the dealer's requirement or any upgrading for corporate image but until then, please re-engineer proton own branch (as per my earlier blog), rationalize the dealer's network then dealer may consider further investment on Corporate Image. Now, with shortage of all model variance and an average sales of 30 cars per dealer per month (if lucky, otherwise an average of 20 cars per dealer), any upgrade of the showroom or corporate image will not increase the dealer's car sales. It is evident from previous CI upgrade. Honda dealers invested almost RM1million to Rm3million in their showroom and corporate image. BMW dealer spend more than RM30million in their 3S building (latest being Ingress showroom near Penchala) but they can do so, because with 80 car sales average per month, their return of investment (on the millions of ringgit spend) are attractive and lucrative. With the current overcongestion of Proton dealer's (in the market with an average car sales per dealer of 20-30 cars per month.... and with proton net profit of only a few hundred ringgit per car... hihii