This is the story of Proton: the automotive star of Malaysia.
Appalled by the degradation of investigative journalism in the recent times, our dear Shubham has donned a long kurta, picked up the pen, diary and a side-sling bag to cover the journey of Proton. To avoid personal biases creeping into my study & assessment, I refrained from referring to the media or even the Malaysian people, majority of whom are very proud of their country and its national produce (especially Proton).
Hence I decided to direct my studies and discussions to the dispassionate assessors of the product. The native inhabitants of the land were nominated- those of who were not necessarily using the product, but have seen it evolve over generations.
|One of the First Proton Saga to roll out: @ the National Museum, KL|
1. Malaysia & Proton
SP (me): Greetings Ms. Horn-Bill, how you dooinn..?
HornBill (HB): Squeak.. Snarl..
I recalled reading somewhere that hornbills hated small talk and thought it would be wise to get straight to the point.
SP: It would be great if you could throw some light upon the story of Malaysia and its rise..
HB: Malaysia gained independence in 1957 and we have worked tirelessly to emerge as a newly industrialized economy. To give you some perspective, let me throw some numbers. The per capita GDP of Malaysia is $17,500 (against $4,000 in India). In terms of Forex reserves, we are ranked #20 in the World and #26 in terms of export, ahead of many advanced economies. The economy had been traditionally fueled by natural resources but we have evolved a lot with our former PM: Mahathir Mohammed’s vision of creating an industrial power to be reckoned with.
Under Mahathir, Malaysia undertook an ambitious range of traditional industrial-policy programs. The two most prominent focused on the attraction of foreign direct investment (FDI) in export-oriented manufacturing, and efforts to develop “national champions” in mass manufacturing and heavy industry, most contentiously in steel and automotive.
(Source: CIA World Factbook)
HB: Ahh.. Proton.. Well. We are proud to be the only South-East Asian country to have indigenously designed cars. Sure, Thailand next door has a lot of manufacturing facilities for Toyota, Honda etc, but they are simply shops producing the designed pushed from Japan (or elsewhere). The idea was conceived by Mahathir Mohammed himself, who had the vision of creating a product that will not just be an enabler for the citizens of the nation, but also a means to reduce the import bill of the nation. Initially, we started with the Proton Saga, which- along with the subsequent models were essentially re-badged Mitsubishi Lancers. However, we have come a long way since.
SP: Is Proton still the leader? Do we have any numbers to back that fact?
HB: Not precisely.. Proton was the leader for many years. It was only recently, that those pesky mini-cars from Perodua have taken the lead in Malaysia.
SP: Thank you for your time Ma’am, its been a pleasure.
2. The Rise: From Domestic leader to a true Multi-National
SP: Hi there!
SP: I am here to get gain cognizance of Proton’s strategy. I heard that Proton initially started as a manufacturer of Mitsubishi vehicles, then there was a failed partnership with Citroen and the Lotus. Are Proton cars truly Malaysian?
Chimp: Well you are right about the journey. What you miss is the major milestone: The Waja. This was the first indigenously designed Proton car. While we have considered partnerships, we are now truly capable of designing and producing our own cars.
SP: Ah! The Waja! I have sat in a couple of Wajas here. Not all great reviews to hear, I’m afraid. Some people end up comparing it with the old Wira.
Chimp: If you would be kind enough to list the names of those who dislike Waja, I will pray hard that they all be struck by lightning.. That is after I have personally shot them twice. Moving on. What more do you need to know?
SP: Now I have to tell you: when Proton took over Lotus, a premier sports automotive marquee, I was very much impressed. I find a dash of irony there as well; for while the British ruled Malaysia in the recent past, it is stunning to see the Malaysian powerhouse taking over (and saving) one of the brands that had played a vital role in establishing British supremacy in automobiles in the early world war era.
Chimp: Well, that’s how things are in the flat world. Have you read Thomas Friedman’s books by the way? Once we Asian tigers have grown well after capitalizing our home-ground markets, the world is our next playground. Whatever Proton has done is remarkable but so have what you Indians and other Asian tigers have.
SP: Err.. I do not quite get it. You say we Indians have done something similar??!
Chimp: Bah. And they call me chimp brain.. Of course you have Mister. This South East Asian automotive phenomenon started off with Thailand first, China and India thereafter. And as for the acquisition story, what better than your TooToo fellow buying out those automotive houses that are still considered the pride of Britain.
SP: Wow! Right you are!! It’s Tata by the way. Not TooToo.. Mr. Ratan Tata. A great man, if I may add. Yep. Tata did come in as the white knight for Jaguar and Land Rover brands. This also helped Ford revitalize itself with the cash, which I am told, was what it was desperate for in those times.
Chimp: Yea Yea. Tata it is. And it does not stop there. It was your home grown Tractor company that made sure that SsyangYong survived. Did you know, what a great task this Mahindra has done?
|SyangYong: A formidible player in Korea in the past|
Chimp: Your ignorance with worldly matters is highly irritating. Wait.. I had it on my files somewhere. Looking Looking.. Ahh!! Here it is! This is not what I say, but what KPMG guys say in their reports:
So much for your claims about SsyanYong being a miniscule forgettable player. You homo-sapiens have much to learn..
SP: Thanks chimp, I walk away with a better understanding of how automotive players transition from domestic markets to the global platform
Chimp: Glad I could help.Now if you could excuse me, I have a banana to finish..
The fellow analyzed me very deeply, seldom blinking or breathing. So I thought we were in a good frame to exchange ideas.
SP: So what are your thoughts on the future of Proton? Do you think it will perform beyond it’s home market?
Baby Croc: Wheee… Look how I wag my tail..
SP: Charming.. But your thoughts on the domestic player getting out of its comfort zone into mature international markets…
Baby Croc: Watch us! We siblings can pile up each other.. Wait.. Sara’s not here. Nor is Tommy.. It’s a lot more fun when we all create a mountain out of us…
I chose not to continue the discussion. It seems 4 month old crocs are oblivious to the future of their nation’s champions. I ought to have carried on the discussions with elders of the clan, but as I elucidated earlier, it was impossible to wake them up from their slumber.
3. The Road Ahead: What Destiny has in store..
I decided that the matter needed someone wiser and more experienced. I decided to look up to the wise one of the land; the name of whom I had been hearing ever since my arrival to this nation. After running for dates with the wise brains of the land, I finally was granted audience with the wise white bird. On the fateful date, we met for our round table conference. Excerpt from the discussion:
|Wise Bird (WB)|
WB (Wise Bird): Glad to see you distant traveller. Now tell me: What is it that weighs your mind?
SP: I am a bit worried about Proton. In Proton, I see a lot of hard work and effort of the nation. I will be crestfallen if it fails.
WB: You read Wodehouse, don’t you? Pray ponder on these lines: Success comes to a hard-worker as a rule, so gradually that it is always something of a shock to him to look back and realize the heights to which he has climbed
SP: I cannot in my dreams try to belittle the toil of Proton, but hard work alone does not make you a winner. I am particularly concerned about the road ahead for Proton. In the local market, another homegrown behemoth: Perodua threatens to weaken Proton (see figures attached herein). Internationally, I am not sure if Proton is actually making a significant impact. So in short, I am anxious about the future of your national car maker.
(Source: Malaysian Automotive Association)
WB: Ahh. I see concern. Is it love? Yes. I see it in your eyes.
SP (shocked): Err.. Love?! Well I don’t know.
WB: Speak without fear child. It will easier to further the conversation once you pour your heart out.
|Proton Wira: Loved by all|
SP: Thinking about it. Yes.. I do want Proton to survive. Love? Well yes again. It started when I saw the first era Saga and then the Wira. It is the Wira that won me over. A huge fan of the boxy low riders of the 80-90s, the Wira did not have to try too hard. Like every red blooded male, I loved the original Lancer & the Evo series. When I got to know that the Lancer design was carried over for the earlier Protons (more prominently in the Wira), I was elated!
To top it all, all the cab drivers in the interior of Malaysia seem to be in congruence with my line of thought. And in my opinion, who are better judges than cab-driver: who spend a lot of time with their cars in varying terrains. Why, I met one in Langkawi who said he would never trade his 10 year old Wira for the latest Persona; for there was no car as tough and durable as the Wira. He went on to say that stopping production of Wira was a conspiracy aimed to make room for other Proton cars.
WB: Great to have shared your feelings for the Wira. I am glad to see the respect it commands not just in Malaysia but even beyond.. But you did not impress upon where your concern for Proton comes from? I believe there is more that you have to say.
How did the wise bird know I had more? That I was apprehensive in admitting my feelings for a relatively small automobile player? Could it read minds as well?
|The challenger: Perodua MyVi|
SP: I am intrigued by your powers o wise one. You are right. There is more to Proton that just a car (Wira) or two. My admiration is more to do with the story of Proton itself. I happened to read the recent history of Proton and am awestruck. A nation which gained independence later than my country- went on to dream of a superb infrastructure and produce cars to reduce the weight on the economy due to imports. Under Mahathir, Malaysia did make this dream a reality. It is an absolute delight for me to see Malaysian families moving around in Protons and Peroduas. For I feel Proton has indeed been an enabler for the citizens, giving them good cars at a reasonable price. And in return, the nation loves Proton and it is great to see the pride in driving cars designed by your nation. At the same time, I do feel a pang of jealousy that my nation has been left behind in this domain.
WB: Thank you dear fellow. Pray take a seat. Now tell me, Don’t you have the same feelings for your national players: Tata, Maruti & Mahindra?
|I took a seat, as Ordered|
SP: I do O wise one. More so on the two wheeler front. In fact, I ride a motorcycle indigenously designed in my country and am proud of the fact. I can’t say the same about the other names you mentioned. Mahindra and Tata make really great feature rich vehicles but age does show on them thanks to the gaps on the quality front. As for Maruti, I feel as market leaders they are cheating us a bit for the substance they put. Moreover, it is not Maruti- it is a Japanese Suzuki.
WB: I understand your concerns mortal. But do not be too harsh on your national jewels. Quality is not something that evolves overnight. Give Tata time. Rather, it’s time is just around the corner- I have heard of its new product offering. As for Maruti, I agree they try to pinch you when they sell you outdated models or jack up prices of their bestsellers like the Swift. However, do give them credit for setting the right examples for the industry, by giving India specific solutions. I for instance am very impressed by the Auto Shift transmission (not Automatic) on the Celerio. A great solution, at a great price.
SP: Thank you wise one. I will try to assuage my thoughts to a more rational side. But forgive me. I fear I drift from the topic.
WB: Coming back to our discussion, I would like you to come up with the answer. I can show you the path, but you are the one who has to tread on it.
SP: I am afraid I do not quite follow you wise one.
WB: Stay with me fellow. Now let us address your concerns one by one. First, you were concerned about Perodua right? I can’t blame you there. Perodua’s little cars have taken over Proton market share since for a good time. Now tell me all you know about Perodua.
SP: Well. As far as I know it is controlled by the formidable Japanese Daihatsu, which in turn is controlled by Zeus of mass automobiles- Toyota! So we are looking at Daihatsu Sirion/ Toyota Passo being labeled as the Perodua MyVi to become the biggest seller of Malaysia.
WB: Right you are. Now can you name Perodua’s mid-size offering?
SP: I’m afraid I can’t. As far as I know, Daihatsu specializes in mini-cars and small jeeps.
|Spreadsheet: Prices in Malaysia (1 RM=INR17)|
(Proton Saga costs 55% less than similar sized Honda)
|Little Laddu: Not as little as the Perodua|
WB: Excellent. So that answers your first question. Remember, small cars may be a temporary phenomenon in a nation with great roads and low fuel prices. And as our nation’s people are empowered further, they will aspire to move from hatchbacks to saloons. And that is what Proton is prepared to do. It is the starting point for a mid-size car, coming at a fraction of price of its Japanese rivals.
Sample this spreadheet:
SP: The Price comparison puts things at perspective. But do you feel that Proton is slowly being labeled as a cheap brand?
|The suave Proton Preve|
WB: Partly yes. One place where Proton has erred is the brand perception. The problem with this strategy has been similar to the one faced by Tata. The Nano, an excellent piece of frugal engineering saw several Indians shunning it away thanks to the ‘Cheap’ tag. Some of it is true for Proton as well. With rising incomes in Malaysia, people are aspiring for more expensive brands. But now, I believe with a product makeover, Proton is very well prepared to take back the lost ground in the near future. Lets see how the new Perdana, Preve’ and Suprima premium fight to win their lost share.
SP: I hope so with all my heart that the value proposition works for Proton. But this 'cheap' tag is tough to shake off among critics.
WB: “Criticism comes easier than craftsmanship”- Thus spoke Zeuxis in 464 BC. And I stand by his words to defend Proton products, which offer great build & quality at an affordable price.
SP: I agree. A small fact: I appreciate the thickness of metal used in Protons. Different from our Marutis at home- which seem to be thinning the sheets to drive up profitability and fuel efficiency for the Indian community.
|Proton Lekir (L) based on the gorgeous Lotus Elise (R)|
|Legendary Mitsubishi Evo (L) inspires the Proton Jebat (R)|
SP: You say there is no big bang. Pray tell something more. At least even some remote possibilities for the good of Proton.
WB: Haha. So you really are a true well-wisher. As for the potential growth spots, I can say this: Proton now owns Lotus. Though Lotus’ future may be questionable, Proton now does have access to the Lotus Engineering arm, which has a rich history in racing. Also it brings along its experience in designing futuristic cars- in house and in a consulting capacity for other manufacturers. Also, the collaboration with Honda is something to look out for.
|Mere Mortal: With the Wise Bird (WB)|
WB: As access to engineering opens up several doors of possibilities, I assure you Proton will not vanish in the future. If anything, it will be stronger and a force to reckoned with. It has seen many things in its time and is moving ahead with a stronger resolve.
Borrowing a quote, I say this:
Viklavo veeryaheeno yah sa daivamanuvartate
Veeraah sambhaavitaatmaano na daivam paryupaasate
SP: Err.. Sir, I am not sure I understand.
WB: I borrow these quotes from your scriptures dear fellow, this one from the fabled Ramayana. What I wish to convey is that:
Only the timid and the weak leave things to destiny (daivam) but the strong and the self-confident never bank on destiny or luck (bhagya)
Here’s wishing Proton a great journey ahead and hope to welcome it to India soon..