Proton Savvy News

The first vehicles from Great Wall will land in the second half of the year, to be followed by Geely and others, but Proton is moving now to establish a price point.No-one from the Malaysian maker is talking exact details, but Proton is planning to easily undercut the $13,990 Korean price fighters and is aiming for something in the $12,000 range.It will do the job with a new model based on the baby Savvy, but price fighting will become the key for Proton when it re-positions the whole brand for 2010.Proton boss John Startari confirms the general push but will not be drawn yet on the details. "We're not talking about the price until closer to the date," says Startari."We're working towards January next year. It won't beat the Chinese, but we believe that for the Proton brand to move forward we need to offer value for money and re-invigorate the brand."He says the new cheapie is the key but admits Proton must do better on price to ever make solid numbers in Australia. The brand has a carpark of around 25,000 here but has yet to reach critical mass, either with customers or dealers."We're re-specifying all our cars. That's Gen.2, Satria and Persona. That will happen at the same time," Startari says. "For us, timing is everything. And we really need the range to start at an aggressive price and then have value across the spectrum. By aligning a lower-priced value leader we can meet all demands below $20,000."The new starter car is basically a Savvy sedan, but with an engine which grows from the current 1.2 in the Savvy hatch to a 1.6-litre Campro. It will have a new name and will not be called Saga, the badge used in Malaysia."It's an all-new car. On the price side of thins, the recommended retain price will be plus on-road costs, but the advertised price will be drive-away - just as we do now with the Savvy hatch at $13,990 drive-away," he says.Startari will not talk about the cost of the price push, or the level of financial support from Malaysia, but admits there is a big budget."It will be the biggest spend on marketing in the last seven years. The initial launch budget in 1998 and 1999, when we moved away from Incape and became a factory operation, was the only one that is bigger," Startari says.He makes no apology for the early announcement of the new focus and says it's not just about undercutting Korean cars or getting an early break on the Chinese."Right now we're in a dealer recruitment process and we need to start talking about the future of the brand and products to get the dealers we need to take the brand forward. We need to recruit the best dealer network available, but we are not going to expand at all cost. It will be a matter of only signing dealers who are committed and eager to be a part of growing the brand."

The Malaysian maker has been searching for a 'big brother' for more than three years and has finally gone back where it began, linking to the Japanese company which helped to establish Proton in the 1980s.It is a product connection with benefits on both sides, as Mitsubishi gets access to Proton's small cars and factory in Malaysia and its renewed partner can tap into a Japanese source for larger, semi-luxury cars.The new deal has only just been completed and and details are being kept secret."It's too early to be saying anything. These are long-term model plans which obviously need to stay confidential," says the CEO of Proton Cars Australia, John Startari.Proton originally intended to create a strategic partnership with Volkswagen for Asia but, when that plan floundered off the back of political infighting in Malaysia, it spoke to many other companies including Peugeot, Fiat and — through Holden — General Motors.It eventually settled on a deal with Mitsubishi as it prepares to spend more than $1.8 billion over the next five years on future models."It's good news. It secures a technology partner for Proton," says Startari."It's also a company that Proton knows well and is a strong and credible partner."Proton is likely to do the work for a shared city car, which would become the replacement for its current Savvy, with Mitsubishi lining up a replacement for the Waja which could be based on its new Lancer.The Malaysian company also plans to tap Mitsubishi's experience to improve its quality and design vehicles which will be more acceptable outside its home country.While the deal is an obvious win for Proton, Startari says the company is doing surprisingly well despite poor sales in Australia."Proton is one of the few companies anywhere in the world that's making a profit right now," he says.While Proton is struggling for cut-through in Australia, it is pushing ahead with new-model plans including its first people mover. It is about to go into production in Malaysia but local demand will delay its arrival downunder."We will definitely be getting the MPV, but it won't be coming until 2010," says Startari. 

Last week government ministers said they were in talks with Volkswagon and French rival Peugeot-Citroen about possible acquisition of the Malaysian government’s 42.7 per cent stake.Peugeot-Citroen last night bowed out of talks and said the company had no plans to buy any part of Proton.Volkswagon is also no longer believed to be interested after the Malaysian government refused to allow the German car maker to have management control.Proton has sold 1628 cars in Australia this year, comprising the light cars Satira and Savvy, plus small cars Persona and Waja.Investment companies including DRB Hicom and the unlisted Naza Group are believed to have expressed interest in the Malaysian Government’s share."We submitted a letter of interest to the Ministry of Finance about two months ago and are awaiting word from them," Naza Group chief executive Nasimuddin Amin was quoted as saying in the Star newspaper.Naza assembles cars in a venture with South Korea's Kia Motors Corp., while DRB Hicom has alliances with Isuzu Motors Ltd., General Motors Corp., Honda Motor Co. and is controlled by politically well-connected businessman Syed Mokhtar Albukhary.But Malaysian ministers are understood to be seeking foreign investment for Proton.Proton, established in the 1980s, is an icon of Malaysia's rapid industrialisation.Its fortunes in Southeast Asia's biggest car market have plummeted from about 60 percent three years ago to just 40 percent this year due to improving sales from second national manufacturer Perodua and cheaper foreign models.ASEAN's impending decision to liberalise decades-old protectionist policies in its auto sector also could hurt Proton's bottom line, analysts say.European automakers are attracted to Proton because it gives them a chance to break into the Southeast Asian auto market, historically dominated by their Japanese rivals.Proton has two plants in Malaysia, with a total capacity of 380,000 cars per year that can be raised to 1.2 million units per year if there is sufficient demand. The plants are currently using only half their capacity.-With wires

Industry figures released this week show the real boom in the market has been in four-cylinder cars valued at less than $25,000.Known as the light car segment, sales in the division are up 22.7 per cent for the year to date on last year, while the large car segment is down the same figure. Last month light cars were up by 31.4 per cent on August last year.Federal Chamber of Automotive Industries chief executive Peter Sturrock says this trend has increased over the past couple of years, with a recent acceleration put down to high petrol prices."Well, quite simply because they are more fuel efficient, small and less expensive to purchase in the first place and they're less expensive to run," Sturrock says.A total of 10,806 light cars were sold last month and 77,650 sold this year, which is 14,346 more than last year. Leading the line-up is the Toyota Yaris, with a starting price of $14,990, which recorded 2673 sales in August, taking the total to 18,064 for the year to date.Added to this figure are the remaining 304 Echos that Toyota has sold this year, before the nameplate was changed to be consistent with the Yaris badging used in Europe.Hyundai's small Getz, named Australia's Best Small Car for 2005 by Australia's auto clubs, has also achieved an increase in sales, with 1738 models sold last month, and 13,863 for the year, an 18.4 per cent improvement over the same period last year.Getz prices start at $13,990 and stretch to $18,380. The cheapest car on the market, the Holden Barina, starting at $13,490, has the third highest sales for the segment, with 1091 sales in August and 9567 for the year to date.The Barina is followed by the Suzuki Swift, Honda Jazz and Kia Rio, all recording between 5500 and 6800 sales each for the year-to-date and just under 100 sales in August.Sturrock says while fuel prices are contributing to a shift to these cars, good value at a low price is also converting buyers."The small cars now are very well equipped," he says. "Some years ago they were the basic models, but now they're well equipped with safety and anti-theft, occupant protection, airbags and ABS, and they often have Electronic Stability Control."Features in this segment on cars such as the Yaris and Getz include front airbags, an MP3 compatible CD system, airconditioning, power windows, central locking and ABS. Some even come with Electronic Brakeforce Distribution and anti-skid technology.Holden's Barina offers airconditioning as standard, a feature that has to be bought as an option in the $34,990 base model VE Commodore Omega. The Hyundai Getz also offers a five-year/130,000km warranty.Toyota spokesman, Mike Breen, says this segment also offers a good alternative to second-hand cars."With the options that you can get on a brand new car, plus the new car warranty, it's quite appealing, especially to younger people," he says. And it seems a wide variety of buyers are purchasing these light cars, from students through to families and retirees.Hyundai spokesman Richard Power says its small cars, the Getz and Accent, are finding a market among a variety of drivers."We get quite a few young people buying it as their first new car and there's loyalty from senior motorists, who don't need a big car any more and are very attracted by the long warranty," he says. Overall, the car market has dropped by 3.4per cent on last year, with 642,383 vehicles sold, a decrease of 22,513 vehicles. August was also down from 2005 by 4516 vehicles.In the small car segment, sales are up 3 per cent year-to-date, with the Toyota Corolla the segment leader with 4147 sales in August and 31,705 Corollas sold this year. But small car sales also experienced a slight drop last month, down 1.3 per cent or 244 vehicles.Sturrock says that although the large car segment is down by 26,461 vehicles, it is still an important part of the market."It has reduced over time from what it was to where it is today," he says. "But it's still about 25 per cent of the passenger car market. You see very strong interest in the new Holden Commodore and the new Toyota Camry, there's been an excellent reaction."WHAT'S SELLINGToyota Yaris 18,368Hyundai Getz 13,863Holden Barina 9567Suzuki Swift 6703Honda Jazz 5936Kia Rio 5579Ford Fiesta 4407Mazda2 3934Hyundai Accent 3593Mitsubishi Colt 1516VW Polo 1337Peugoet 206 1071Citroen C3 486Proton Savvy 357smart fortwo 326Renault Clio 173Citroen C2 139smart forfour 132Fiat Punto 113Daihatsu Sirion 40Proton Satria 9Suzuki Ignis 1*Source: VFacts (light car sales 2006 to end August)Note: Yaris sales includes 304 Echo salesTHE CHEAPIESHolden Barina from $13,490Hyundai Getz from $13,990Proton Savvy from $13,990Toyota Yaris from $14,990Hyundai Accent from $15,990Mitsubishi Colt from $15,990Suzuki Swift from $15,990Ford Fiesta from $15,990Honda Jazz from $15,990Kia Rio from $15,990Mazda2 from $16,335Peugeot 206 from $16,990VW Polo from $16,990