10-year growth plan has eyebrows raised.
Malaysian carmaker PROTON was very recently in the news following a 49.9% stake acquisition by Chinese automotive conglomerate Geely, the latter party famous most for its successful, profitable, and sustainable turnaround of Swedish luxury marque Volvo. Geely’s impressive work with the Swedish company, and their aggressive attitude to business, means that there are huge changes on the horizon for PROTON.
Released to Malaysian daily the Star, the PROTON team headed by new chief executive Li Chunrong intend to get the failing company bak on track “as soon as practicable,” a commitment underlined by comments Li made shortly after he took the helm to get PROTON’s suppliers to drop their prices by some 30%.
To provide some context, PROTON competes only in a handful of foreign markets, and in its home market of Malaysia. In 2017, the debt-heavy company sold only 70,991 vehicles, yet the company is confident that with the cooperation of its new Chinese partners in Geely, they can more than quadruple that figure in the next decade.
“The first three years is the most critical period for PROTON to turn around. Company-wide efforts are being harnessed to achieve this objective.” — PROTON
Aside from tackling the overinflated costs from suppliers, PROTON has already taken quality control to task. Amazingly, by the end of 2017, just a few months after Geely’s investment into the company, PROTON achieved an improvement in quality thanks to the utilisation of a stringent quality control system “aligned to the international standard of Volvo.” By the end of 2018, PROTON is expected to be at par with Geely’s products in China, which are in line with the company’s intentions for PROTON.
In the next decade, PROTON expects to introduce three new models, and renew four others that are already in the lineup. Of those three models, we already know that PROTON is set to introduce its very first SUV, which will compete against cars like the Mazda CX-5, Honda CR-V, and Kia Sportage, while the other two models remain a mystery.
The report details that PROTON aims to hit an annual production target of 200,000 units by 2020, with 300,000 achieved in 2023, while 400,000 will be hit by 2027. All of these cars are expected to be made at PROTON’s expansive production centre in Tanjung Malim, an hour north of Malaysia’s capital of Kuala Lumpur. The strategic location of PROTON’s Tanjung Malim production facility means cars made there can be easily moved to major ports for shipping; This would be capitalised on for Geely’s emerging brand Lynk & Co., which is in need of a facility capable of manufacturing right-hand drive versions of its cars, which will then be shipped globally. PROTON itself will also sit as an entry-level brand within the Geely stable, with Volvo and Lotus sitting above it.
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