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Jeff,

I'm disturbed by these reports which are not giving any numbers. They have openly "plugged" a value of 800K cars, but none of them seem to have shared a breakdown as to where they additional 300K cars came from. Glut can be from the followign sources:

1) Poor sales of proton cars due to poor product ranges that are unappealing to public, leading to high proton stokpile. Since proton didnt slow their production fast enough, they (Proton) has caused the glut.

2) Sudden increase in AP cars from outside the country, leasing to 300K cars sitting as CBU somewhere.

Perhaps i have overlooked, but i cant find any details on the above. SO where did the 800K cars figure came from?

Also, as a Malaysian, i'd like asnwers to question 1. Why has all the existing proton product range been so un-appealing to the malaysian public, some up to 20yrs old? Didnt the company under the leadership of the current product range (reads TM's team) do proper market survey?

Also, why hasnt any journalist done a survey to acertain if the lost sales of proton are caused by AP holders or Perodua Myvi. I can do this, provided someone can extract the monthly car sales figures from MAA website. Unfortunately, the MAA sales figures are only open to car dealers, hence ppl like me cant apply for access to those data unless you pay for it!

This news is scarry, more so is the fact that you can now buy a Waja for the price of a 2005 brand new Gen 2.

Thailand was not a motor vehicle exporter until financial crisis in 1997 hit them and domestic motors vehicle sales plummet. Being abled survivors, even during colonial times, the Thais exported their products to make up for this shortfall. The rest is history.
Proton under mahaleel did exactly the opposite. He requested and obtained from the previous administration of Dr. M, defferement under AFTA for motor vehicles imports from ASEAN countries. this somehow indicates that their car prices are not competitive and destroyed the vision of ASEAN as a single market.

Just to re-iterate, the reports did share figrues, but very off-the-air. I think it'll be good for journalist to get to the real detail to see where the source of the numbers came from!

Price of second hand cars in Malaysia has been ridiculous for years already. Finnally is is approaching world levels.
In Europe a car of 3 years++ whatever brand (except merc(diesel)|bmw) would be sold for around 4000 Euro maximum!
Personally in Europe i only bought 1 time a new car, for the rest always drove 2nd hand, because it save you tons of money.

when the used car dealers made so money during good times..they kept quiet?....when going gets tough..they whine..!!

How did the used cars dealers end up with stocks in the first place.. greed? unable to read and forecast?

Typically malaysian....complaining all the time.

Maybe they should dispose all the stocks at whatever price they can get..and go into another business..but given the same mentality....it will be complaints against when business is no good..

So to Edaran Automobile Nasional Dealers Association of Malaysia (Edam) president Datuk Ismail Din, just ask your memebers to cash out and park the money in a bank.

Edam thinks that exporting reconditioned cars to third world countries will help to alleviate the problems faced by car dealers. But why would third world drivers buy made-in-Malaysia used cars when new ones cannot make an inroad?

Edam also thinks that "re-consolidating" (merging?) Proton Edar and EON would end the "unhealthy competition" that subsists between these two parties. When has competition been bad for the dealer and the ultimate buyer?

From the outset, Proton could not have have survived without the government's protection. Everyone knew that. Yet APs by the shiploads were dished out, ostensibly to uphold free trade and to satisfy our dear Malaysians' insatiable demand for foreign-made (so, therefore, must be better)cars. Besides, there could have been other lucrative reasons. Also, there had to be more than one local manufacturer - in a small market. In essence, the government had a hand in screwing things up for the car dealers.

South Korea does not have a very large population and, like Malaysia, not a large original equipment market. Yet SK cars are nearly everywhere on this planet.
The people in our local industry always knew we have to pursue overseas markets for the industry to survive and grow in the long term. After so many years Proton has yet to make a meaningful dent.

Perhaps we had the wrong people people making the policies in the government and the wrong peolple running the businees inside Proton.

It's about time that we grow up and learn from our mistakes. Time and again we see companies without a sound business model and lacking competitive instincts struggle when exposed to principles of free market trade. Our Gov't is always rushing to prop up these companies with our hard-earned tax money under the guise of national policy to encourage bumi entrepreneurs. In the articles above we see these ppl asking for more monopolistic policies so that they can keep surviving. When will the gov't learn that businesses that are failing have to be allowed to fail, so lessons can be learnt and implemented and more successful and robust businesses can be created. I fear for Malaysia in a competitive world.

birdeye,

well said..

thats why i said before TM knows nothing about cars, i rather put some amat/acong selling goreng pisang who knows more about compietition to run proton than TM.

TM do not know the word competition, the only word he know is monopoly and protection, or maybe whining about AP...lol

This was taken off The Star today July 17, 2006...
Typical Malaysian mentality, lets hide the problem, no one will know....

"It is learnt that at a recent meeting, Proton told component manufacturers not to alert the media of the problems facing the industry.

“But there is no way we can keep it a secret. Eventually, the public listed companies must explain to the Securities Commission why there is no more profit,” the source said."

Just a normally shake up in the industry, it happens to every trade. What is the big fuss? Or do we need to revert back to those days when the customers need to pay extra to get a new car?

Let's face it. The cars are not cheap in Malaysia, we the consumers have been deprived from our rights and our voices were never heeded when the Old horse was in cherged.

I forsee a potential measure that will be taken by the government based on their type of logic.

Since you can't export even used cars to where anyone would want, and you can't export enough of new cars either, but you need to move the existing stocks... I forsee....

A new VEOL policy.

Vehicle End Of Life policy.

It shouldn't surprise anyone that bolehland will come up with such policy to obsoletize your 10year old++ rides.

This is the only way they can move their stock, by forcing people to scrap their old cars.

This will make Proton and 2nd hand car dealers very happy.

The spin in the media now about the stock glut may well just be the first step towards slowly introducing the VEOL policy.

Get ready to be trapped into another decade of debt folks.

i don't think the govt is that stupid to start VEOL.

Imagine the millions of proton owners voting the opposition in protest. Car ownership is a "priority" as far as malaysians are concerned...and when you introduce VEOL you are actually penalising the people that had supported the protons for so long....

and what guarantee that even if the VEOL come in place...will they buy protons or KIAs and Hyundais..or Chery..

Vehicles sales figures (last yr and this yr) are more or less the same...except that buyers are now migrating to other brands.

Must be a DAMN stupid government if they are going that way..

Since when has the government not do anything stupid or illogical ?

This is bolehland, anything goes!

Don't be surprised if they really do come up with the VEOL policy. ;)

I suggest an alternate policy called the VEOP, for End Of Life to Proton. Kill Proton, retrain all it's employees and set up some foundries and recycle all the existing Proton stock into aluminium cans. Existing Proton users are welcome to contribute to the recycling effort. Now where's that online petition site..to get the ball rolling...

Jeff ooh Jeff, I feel like want to pengsan already. Here, Tengku Mahaleel again try to picture himself as an angel, and act as if he has nothing to do with malaise in Proton.

JEFF OOI says: Hang on there brother. We are going to the man to answer your questions face to face, over teh tarik and roti canai, and possibly over Internet TV. Come and join us in the studio when I have the logistics firmed up.

VEOL? No way! How are they going to win the kampong folks vote if their old jalopy are suddenly scrapped and forced to buy a Proton?
Export second hand cars? The second hand value of our car is way tooo high .Why should they buy our proton when they can buy quality Japanese / European cars at cheaper prices.
Malaysia motor industry is now in such a sorry state because it is run by jokers like tM and EDAM president and Rapidah

Well who knows, maybe they can implement selective VEOL application.

Kampung folks no need to be subjected to the rule, only the middle class income people will get it, especially those living in urban areas.

Based on your income tax level can see if you can afford to get another vehicle, they will individually contact them that it's time to scrap their car.

There's simply no other way out, and they can't place further barriers on non-national makes because of further repercussions internationally. By 2010 things must be clear.

The government will always choose the weakest they can bully and the rakyat is the easiest target.

They know very well even until the next GE they will still get voted into power, so I don't think they'll worry at all about the VEOL affecting them much.

My guess is VEOL is in the picture, whether you or me like it or not, believe it or not.

It's now either we die, or they die situation. If they don't implement VEOL, their car/stocks will not move.

How about a VEOL policy which applies to every car owner in Malaysia except the Proton's one? Good idea, right, Proton?

By the time you finish paying off your car loan, you have to junk your "brand new" car in favour of a "brand old" proton iswara edisi spesial.

VEOL was mentioned in one of those articles talking about the glut, right?

Ah - we Malaysians are at it again - trying to prove the Malaysian Govt. is always wrong. Not only the present Govt. but also the former Govt. let by TDM. I guess our memories do not let us go back before TDM's time orelse we would spew fire over that period too.
When will we learn to live & work as rakyats of a united Malaysia or should we spend the rest of our lives complain, complain, complain...
Guess the song 'Malaysia Berjaya' should be changed to 'Malaysia Mampus' - written, orchestrated & sung by the beloved rakyat of Malaysia!
MALAYSIA mana BOLEH kalau kita sendiri cari maut!?!

If all of us just keep quite in the name of a UNITED nation,then we would probably still at the level of Cuba or N.Korea.

It is fair game for public policies to be critically examined,unless we are in a totally dictatorial managed by a despot who only mission is to keep his power,I do not want that.

Both TDM and AAB have publicly claimed that they loved feedback(critical or otherwise)so what is the proble,I see NONE!

http://paultan.org/archives/2005/07/21/proton-vendors-want-protection/

Here's to jogging your memory. Link source from Paul Tan. Here's an excerpt:

"
The Proton Vendors Association wants AP holders to be barred from importing cars that are in the segments of markets that Proton is in.

It’s president Dr Wan Mohamed Wan Embong outlines what they want to be implemented in the National Automotive Policy. They hope the government will consider it.

1. Vehicles with engine capacities less than 2 liters should be barred from being imported, regardless of whether it is new or used.
2. Approval letter should be seeked from Proton and Perodua before cars are allowed to be imported.
3. Cars more than 5 years old should not be allowed to be imported, regardless of engine capacity, other than those classified as vintage cars.
4. Declared price should be based on open market value decided by a council formed by the government.
5. Excise duty must be continued indefinitely.
6. Implement Vehicle End Of Life, where vehicles older than certain age should be declared not road-worthy, or have increased tax and other miscellaneous fees. This is to encourage new car sales.

"

You may read the rest and the outrage at that link.

A lot of decisions and policies are implemented due to strong lobbying from interested parties. These are what we termed "half-past-six solutions" on an ad-hoc basis.

Example in the removal of "floor pricing" for MAS.

And what happened to the Tzunami Warning Syatem? Who has pocketed the money?
There was a 2m high Tzunami this afternoon in Indonesia and what warnings we got?
Check details at:
http://powerpresent.blogspot.com/2006/07/earthquake-72-hits-indonesia-island.html

Those wishing to attend the Q&A with TM may want to check out the following link for more information on the sala of MV Agusta: http://www.mvagustausa.com/web-mvagusta/news/CN_011106.pdf

Looks like another govt bailout is imminent....at the expense of tax payers?

The Proton issue is an issue that has been brewing in the background for a long, long time. It baffles one to think how a company that has the full support of the Malaysian Government via protectionist policies failed to be competitive in the local and international markets. One has to look into the history of Proton to understand why we are facing a glut of locally produced Protons that nobody wants to buy anymore.

Proton was formed in 1983 and started selling cars that were based primarily on Mitsubishi cars. The list of cars re-badged or re-engineered are:-
- Mitsubishi Lancer Fiore (Proton Saga/Iswara)
- Mitsubishi Lancer/Colt (Proton Wira)
- Mitsubishi Colt (Proton Satria)
- Mitsubishi Mirage (Proton Putra)
- Mitsubishi Eterna (Proton Perdana)
- Citroën AX (Proton Tiara)
- Mitsubishi Town Box Wide (Proton Juara)

In fact, the first truly Malaysian designed Proton was the Proton Waja but as the Campro engine wasn’t quite ready yet then, Proton used either a Mitsubishi or Renault engine, depending on the cc of the car.

The first truly locally developed Proton is the aptly named Gen.2, launched in 2004, more than 20 years after the launch of Proton Saga. This car features truly local design and engines. Interestingly, Proton shifted gear and used a Renault engine for its next car, the Proton Savvy.

First of all, it is very interesting (or alarming) to note that Proton still sells Proton Saga (23 year old design), Proton Wira (13 year old design) and Proton Perdana (11 year old design)- albeit all with contemporary face lifts. The original Mitsubishis have today evolve to the likes of Evos and later day Lancers and Colts. The question for the Proton management team, past and present, is why haven’t they refreshed the car line? It is almost unthinkable for a car manufacturer to keep on relying on face-lifts to sell cars that are more than 20 years.

The global car industry has come very far in 20 years. Companies were acquired and merged. Processes were streamlined and improved. More importantly, alliances were formed and milked for all their worth. Seeing all this and facing an increasingly stronger challenge from Perodua (itself a Toyota related company), Proton decided one fine day in 2005 to acquire 57.7% of MV Agusta, a motorcycle company.

What is the purpose of this purchase? The most common line of answer is that BMW and Honda started first as motorcycle manufacturers and look at where they are today. But in 1959, BMW was close to selling off its unprofitable car unit to Daimler-Benz and was stopped after trade unions stepped up their opposition. Honda manufactured cars for local Japanese consumption but managed to break into the US market because of the 1970’s energy crisis and made it big there. What is the timeline that the management had set for MV Augusta to contribute to the fortunes of Proton? How much were they prepared to pump into the ailing Italian company to turn it around?

In terms of brand, Proton is still plagued with negative perceptions pertaining to quality & reliability. The majority of us who had owned a Proton have stories to tell about how the power window stops working after a few months or how sudden permanent inexplicable noises appear after the car had gone through a few bumpy roads. Remember how the car interior feels of cheap plastic? As we move on to our second or third car, our preference for Proton diminishes because we remember what a bad experience it was in owning the car. While Proton may have gotten Lotus tuned car or TUV certified vehicles, the perception among car buyers is that quality and reliability in a Proton car is still sorely lacking.

Looking at Proton’s early days, one could not help but to draw comparison to Perodua and to a lesser extent, Naza. All these companies took foreign cars and tweaked them to call their own. In Thailand, the big car companies like Toyota set up big production plants to cater to the regional markets, which is a different approach from where Malaysia is heading. We seem to be obsessed with having “national” cars, a label that has become totally meaningless in the 80’s when the Japanese car companies started setting shop and revolutionizing the manufacturing process in America. And today, it doesn’t matter to the Americans anymore that the Toyota Camry that they drive, though having a Japanese name and coming from a Japanese company, is designed and manufactured in the United States. To them, its an American car.

JEFF OOI says: Is the Toyota regarded as an American car more likely be Lexus and NOT Camry?

AFTA was signed in 1993 and intended to be implemented in 2003. This means Proton had 10 (12 actually because M'sia lobbied and obtained additional 2 years exemption for it's automotive industry) years to prepare for competition. In these 10 years Proton's response was Waja and the Gen.2. The Gen 2 car project, labelled as the Wira replacement, was only started in the year 2000.
You can judge for yourself if this was a successful model, considering that variants of the Wira are still being sold 2 years after it's replacement was launched. Also take into account that you can drive a Gen 2 out of the dealers lot in the UK for 1 pound.
AFTA wasn't forced down Proton's throat overnight. They had more than 10 years to equip them selves, develop competitive models, cut-costs and build up a successful regional brand name. Unfortunately, someone sat on their arse too long expecting that bariers will continue to be in place post-AFTA. This is why Proton finds itself in the situation it is now. Only some painful decisions will be able to save it now, include serious re-organization efforts and possibly lay-offs and plant shut-downs. The questions is, does it have the guts to do the right thing?

well mithos

the sad fact is over one quarter of million ppl will be out of their job from this cottage industry ...

TDM's legacy of a national marque was a noble one ...

however, along his 23 years as the premier, his biggest setbacks were his wrong choices of people to trust as much as the current PM he had chosen ...

If only the execution of the noble goals were much more transparent and with the right people, it wouldn't have to come to this stage ...

but to allow the typical argument that the market forces dictate the demise of Proton is too simple considering most of other things in our economy is one of inteference by government/Bank Negara thru' fiscal/monetary policy ...

Putting in the new guy to replace Tengku Mahaleel will only prolong the inevitable and the delay the demise of this cottage industry if fundamentals are not in place ...

We are talking about a lack of EOS - economies of scale in manufacturing ...

Even by swallowing the P2 segment, it is still a far cry from the usual 0.5 to 1 million unit of cars to be sold to break even for the cost of developing a car model which is roughly the equivalent for the likes of Toyota/Honda to break even before calling quits and introduce a new model every 3-5 years ...

With the looming world oil crisis, the national car is not really a bad idea for its own people ...

Instead of solid reliance on petrol combustion engine, we should have the vision to look beyond 2010 where Malaysia will soon become a net importer of petroleum ...

Other alternatives exist namely smaller combustion engine, hybrid, bio-diesel and etc ...

P2 should also start designing not just bodies for vehicles - get a JV on combustion engine technology just like how VW develop their FSI engines - engines with small 1.4 litre displacement and fuel consumption but performance of a 2.0 litre motor ...