The recent Exora, a 7 seater MPV was launched to try and grab more market share from the already competitive market but that has failed to mark the arrival of any revolution as yet. According to Datuk Mohd Nazmi Mohd Salleh, the chairman of the company, the current global economic crisis is the main problem. He said “The softening of the automotive industry arising from the global financial crisis had also adversely affected the performance of the group in the second half of the financial year,”
The 18.4%drop in total revenue for the quarter resulted from the RM217.5million profit previously. Nazmi added “The main reason for the group loss was Proton’s decision for the impairment of property, plant and equipment (PPE) and inventory write-down for certain models impacted by volume contraction. Additionally, the results for the second half of the financial year had also been adversely affected by the accelerated amortisation of certain dies and jigs as well as the increased costs of components and raw materials arising from higher foreign currency exchange rates, particularly, the Japanese yen and the US dollar,”
In terms of car sales, the same time last year, Proton sold about six thousand vehicles more as compared to the current one. This is translated to a full year of RM320.3million loss but last year was a good year when it recorded RM6.49billion in revenue , up from RM5.62billion a year before that.
Datuk Syed Zainal Abidin Syed Mohamed Tahir, the Managing Director of the company said “Proton’s balance sheet remained healthy despite the loss and that cash reserves at the end of the quarter stood at RM899.5mil compared with RM1.17bil last year. As a fully fledged automotive company, we spent a substantial amount on the development of new models such as the Proton Exora and Lotus Evora during the year. While this had affected our cash reserves, we will be able to recover when the cars are sold,”
He was also upbeat about the new Exora adding that “The Exora has also given Proton the opportunity to tap into a new segment – the MPV segment, which has a lot of potential and could help improve Proton’s market share and overall volume growth. Following the success of the Exora in the domestic market, we are now planning to launch the MPV in the Indonesian market in July, which has a sizeable middle-class market and is predominantly an MPV market.”
To say the least, exports are one of its upcoming business models where China and India are great prospects. He said “Besides having a strategic partnership with Zagross Khodro for the CKD (completely knocked down) assembly of the Wira and more recently the Gen.2 models in Iran, we have also entered into a business relationship with Youngman of China for the CBU supply of our Gen.2 and Persona models, which is sold and distributed in China under Youngman’s Europestar badge, potentially leading to CKD assembly operations. We are also finalising our India strategy by the end of the year and we are indeed excited with these prospects in making Proton cars available and more visible in the overseas markets as this will hopefully enhance our revenue. In terms of volume, we are aiming at doubling our total sales volume by 2010, of which the bulk will be derived from the export markets,”