Proton News

The price fight is being sparked by Proton, which has taken the lead from Suzuki as both brands - and a bunch of others - brace for the first Chinese passenger car imports later this year. Suzuki dived first into the sub-$12,000 range with an $11,790 showroom sticker for its baby Alto, as well as a drive-away deal that runs through January at $12,490. On-road costs are generally set around $1500. But Proton is now ready to go with a $10,990 price fighter.  It is a 1.3-litre version of its S16 sedan and, even though it will only have a single airbag for the driver, the Malaysian make is expecting a solid response. "We'll have the car in showrooms on June 1. We're finalising the plan at the moment," says John Startari, managing director of Proton Cars Australia.  We're still working on the specification and assessing the market situation. We need to determine which strategy we use going forward." But he confirms the $10,990 starting price - before on-road costs - and says it is a follow-up to the current 1.6-litre S16 at $11,990.  "The S16 is already a winner. We only got the car into showrooms in December and, of the 334 cars we sold last month, 228 were S16s. It's certainly had the impact we were after." Proton has taken over from Korean cars - Hyundai led the way - as Australia's price fighter and Startari makes no excuses for trying to drive the brand forward. Proton came to Australia in 1995 and, despite some successes with a GTi and its Jumbuck ute, has never made a real breakthrough onto shopping lists. "The price thing is more about establishing the brand. It's about time we established Proton as a contender and built the sort of carpark we need to allow us to expand," Startari says.  "We need a minimum of 25,000 cars in the carpark and at the moment we're around 15,000. We have a five-year plan in place to grow that. "We'll be very aggressive in the initial stages. So there has never been a better time to buy a Proton."

The Malaysian carmaker has acted early to head off the potential price threat from Chinese imports, and to try and reach critical mass in local showrooms before the Geely and Great Wall brands gain traction in 2010. The Proton price fighter in the S16, a four-door sedan with a 1.6- litre engine, and the company is aiming for around 1800 sales a year. The S16 is a major gamble for Proton, which has never gone beyond a bit player in Australia despite good looking cars including the baby Savvy. It has struggled to meet quality expectations and performance targets for local buyers. "We're doing this to establish the brand in Australia. Set the foundations for the future," says Proton boss, John Startari. "Proton has been in Australia for 14 years, but the results over the years don't represent the true potential of the brand." He believes the S16, which was originally intended as Australia's cheapest four-door sedan but now also undercuts the $12,490 Suzuki Alto hatch, shows what Proton can do when it is serious about selling. "The product is the strongest point of the car. The price has been set up intentionally to draw attention to the car, and people will be pleasantly surprised when they drive it," Startari says. The only real shortcoming is a single driver's side airbag. Otherwise the car comes with aircon, power steering, remote central locking and CD sound. There is no automatic, at least at first. Proton says it will come early 2010. Proton also boasts about 82kW of power, economy of 6.3L/100km and Lotus-tuned suspension. It has signed Miss Universe Australia, Rachel Finch, to tout for the S16. Startari is hoping the car works and says Proton has done all it can to make it a success, including an early bonus from the import duty car for automotive imports from January 1. "We're on sale from December 1 and, at this stage, we'll hold the price into the forseeable future. The exchange rate is also helping," he says. "We have already factored the five per cent duty cut into the price of the car. In the 2010 financial year we're intending to sell 1800 S16s. That will take our volume to just over 3500, then moving up to 5000 cars after that."  

Three budget utes — two from China and one from Malaysia — have scored poorly in the latest crash tests done by the Australasian New Car Assessment Program. The Great Wall Motors SA220 and V240 utes from China scored just two stars out of five. The third ute, the Malaysian-built Proton Jumbuck, did worse, scoring just one star.All three models received severely deformed cabins when crashed into a wall at 64km/h to replicate ANCAP's off-set head-on collision. The utes also had poor impact protection for both the driver and passenger crash test dummies, which recorded critical head and leg injuries.ANCAP council chair and VicRoads manager vehicle safety, Ross McArthur, said the results for the China utes were particularly disappointing because they were new models.The SA220 and the Jumbuck lack airbags and other safety features that are expected as standard equipment by new car buyers, McArthur said. “The V240 has dual airbags but these failed to protect the driver and passenger from injury in our crash tests,” he said.Proton axed its $16,990 Jumbuck several weeks ago in anticipation of the arrival of a new model. However, Proton Australia managing director, John Startari, said the ute was not withdrawn because of the impending crash test result.The ute, which has been in the market for about seven years, had reached the end of its production life, he said.“But a new Jumbuck is a fair way off,” Startari said.GWM is one of the first Chinese carmakers to begin a big push on to the Australian market with low-cost vehicles. Both the SA220 and V240 were launched in June, with prices starting at $19,990.Chinese-built vehicles have a history of poor crash test performances. A four-wheel drive Jiangling Motors LandWind model famously scored zero in similar German crash tests in 2005.To check out the latest results, go to www.ancap.com.au  

The Jumbuck ute is into run-out in Malaysia and, with limited supplies remaining at the factory, that means the car will die within six months. But the Jumbuck is expected to live again when Proton switches the compact pickup to the back of one of its newer production cars."The factory is running out their stocks of parts. Once that's done, that the end of the current Jumbuck," says John Startari, managing director of Proton Australia. "The Jumbuck has been our best seller since 2003 and has worked well for us. So we'll take as many as we can get from the final production."Startari denies the end of the Jumbuck is related in any way to a recent ANCAP crash test, which is expected to only give the Proton a two-star rating. "It's a Malaysian decision. It has nothing to do with the crash test. We haven't even seen the result yet," he says.The original Jumbuck - the name was chosen by Australian dealers - is based on the Proton Persona four-door sedan and the product planning team is considering several choices for its successor. It has built prototypes based on almost every model in the lineup, from the baby Saga sedan to the Satria and new Exora people mover."The important point will be that the new car will not only be the lowest cost commercial but also amongst the safest on the road," Startari says.He is promising everything from multiple airbags and anti-skid brakes to Lotus-tuned suspension and a passenger safety cell with much more protection than the original model.A go-ahead on the new model is expected sometime in 2010 but Startari says there has been no decision yet. "We are working with the factory on various concepts. Once the feasibility study is done the decision will be made. It's probably going to be early next year," he says. "But nothing official has come from the factory and we cannot speculate."The successor to today's Jumbuck will be a crucial model for Proton as, apart from Australia, it has worked well in other Asian countries where pickups are popular.Proton also hopes it will be an export spearhead into countries where it is looking to expand, particularly in north Africa and the Middle East. "If you look at the markets where they compete, Thailand is one of the world's biggest markets and will have a major say in any future Jumbuck," says Startari. "Australia is also an important market and we've sold 5234 since the Jumbuck was introduced."While the Jumbuck successor is still to be chosen, Proton is working on a model plan for 2010 that includes a range of vehicles from the go-faster Satria Neo R3 to the Exora MPV seven-seater. 

The Jumbuck is set for a crash test by the Australian New Car Assessment Program. Proton Car Australia managing director John Startari admits to being a little perplexed by the decision to test a vehicle that is close to the end of its sales life here, having been on sale here since early 2003. "I found it a bit strange they'd be testing a car in run-out, it wasn't done in conjunction with us, but I don't know why they selected it when we have newer models to test." "I know that it passed all the ADR requirements for the area that it was imported under, it complies with all the rules of today, it hasn't been tested for NCAP," he says. Startari says he'd be as surprised as everyone else with the ANCAP crash test result for the little utility but couldn't nominate a star rating estimate. "It won't be a five—star car though, no airbags and the like, it still has to pass the ADR tests and it did that without airbags, but I have no idea what star rating it will get." "Jumbuck was launched in 2002, and designed five or six years earlier than that, so NCAP wasn't really on their mind then, maybe other brands being introduced without airbags has had something to do with it, maybe they want to be seen as impartial but it really doesn't make sense to me," he said. The country's cheapest utility is well into run-out now and Startari says a decision is yet to be made on its replacement. "It's in run-out now — it's the last car we have on the old Mitsubishi technology, it's been around since 2002, but the platform has been around since the 1990s. "The Jumbuck has served us well here … it's been a great car for us in Australia. Proton is looking at replacements — they're just deciding which way they're going to go." ANCAP chairman Lauchlan McIntosh says the Jumbuck crash test was part of a focus on light—commercial vehicles, in particular utilities. "We've bought one and we're going to test it, they're still being sold. We're testing a few utes at the moment, we've got a focus on commercial vehicles generally and the Jumbuck is part of that group," he says.

The Malaysian car maker is now export—focussed and with a revitalised pricing strategy, an all—new model, as well as entry—level price point variants of its existing range, in the Australian market. The company has brought forward the introduction of what it claims will be Australia's lowest priced sedan, which will now arrive in October this year instead of early next year. With a sub—$13,000 pricetag Proton Cars Australia managing director John Startari says the car's compliance process was completed early and he saw no point in delaying new product. "We're offering a four—door where many are three—door — you'd argue that the buyer, if they can get more for less, might switch to a sedan if the price is right." "Initially we'll get the manual with the 1.6, early next year we'll have other variants in automatic and manual, with the 1.3—litre engine — it's based on the Campro 1.6 engine." Startari says the new—entry level models of Satria Neo, Gen2 and Persona would be introduced here just before the end of the year, a big part of the sales increase strategy. "We're looking to triple our sales over a two—year period, that's on the back of a substantial increase in marketing, the introduction of a more price—competitive range — we see the volume growth at the lower end," he says. Brand awareness and its dealer network have been two of the brand's main issues - something Startari aims to address within the new plan. "Our dealer network has undergone substantial change, we've parted company with 17 of our 41 dealers by mutual consent, we went to them with our plan, with infrastructure that was required, which required some investment on their part, those that didn't want to do it agreed to cease trading." "We've recruited seven new dealers in the last two months, which we have to fast—track now because the car is coming quicker — we need to be at 50 dealers by the end of 2011 nationally. "We've parted company with nearly half our network, we wouldn't have done that ... things needed to change and in the last 18 months there's been some dramatic changes, I'm not saying it's the last throw of the dice but things needed to change." Startari says the brand erred with its buyer—direct strategy and had needed to raise its profile with consumers. "We're dealing with an awareness problem, we should be selling 4000—5000 a year, we've researched this and found out why - there's nothing out of the ordinary — at the end of the day it comes down to awareness … if they don't know us, they shy away because there are other more visible brands out there," he says. "Proton has already recruited a number of new dealers and they have told us that they had considered taking on other low cost brands but did not want to take the risk with brands that do not have an established record in Australia." With a number of Chinese brands coming into the market, as well as existing Japanese and Korean brands increasing small—car numbers, Proton sees its strength in its 15—year presence in the market. Startari says the Australian arm's four—year business plan has factory support. "The factory knows it will be tough in the early stages, the market has changed but the foundations of our business plan is still sound and we believe we can achieve it," he says. "Clearly there will be new low cost brands entering the market in the coming months, however Proton's strength is that it has been in this market for close to 15 years and is a factory owned operation with the full backing of our parent company in Malaysia. "Product, pricing and marketing support have received major boosts from our parent company to ensure that we have the tools to expand our market share in this country," he says. "The next 12 months will tell if we've got it right - or if we've got it horribly wrong.”

Suzuki Australia general manager, Tony Devers, is one of several car executives who believe the Chinese still have some way to go to gain credibility among local buyers, saying they are still an unknown quality on the Australian scene. "They still have a long way to go," he says. Devers comments come as North Americans say they are warming to Chinese cars.A survey of 30,000 new vehicle buyers by Automotive analyst firm, AutoPacific, found that 15 per cent of US new car buyers say they will consider buying their next vehicle from China and 11 per cent will consider an Indian car, without knowing specific brands or vehicles. This compares with 16 per cent who say they will consider a vehicle from Korea, which has been marketing vehicles in the US since the 1980s.Devers believes that to succeed here the local Chinese cars will need to be at least $1500 cheaper, with comparable equipment and safety to the Japanese. "China is still an unknown," he says."It's a difficult job to launch a car today. It took the Japanese many years to establish here, the Koreans were quicker and I expect the Chinese to be quicker again."Malaysian carmaker, Proton, which sells far less vehicles here than Suzuki, is confident of beating the Chinese on price. Proton Australia managing director, John Startari, says the company's new small Saga sedan is part of a wider plan to help battle the Chinese. The new well-equipped small car is expected to sell for around $12,000 when it arrives early next year.The other Chinese challenge is from small vans and commercials. Suzuki's Devers says he is still keen to broaden Suzuki's light commercial vans from the APV but the global financial crisis has slowed progress. "It will be steady as she goes for another 18 months," he says.Suzuki sources its 1.0-litre Alto from a state-of-the art plant in India. However, Devers says the quality of the car is as good as anything out of Japan.Sydney based Ateco Automotive Ltd is spearheading the Chinese push. It has recently launched the Great Wall Motors workhorse utilities and is expected to follow up with a range of small cars. Already several new Chinese cars and one four-wheel-drive are going through homologation to meet Australian design rules. Ateco is also looking at Chery cars.

The experience will go swimmingly for the brand, or it will backfire and become an embarrassing mistake. So when V8 Supercar driver, Mark Skaife, got behind the wheel of a Proton Satria recently for his stint as a celebrity driver on the local version of the UK hit Top Gear, Proton Australia company executives were justifiably nervous for their car. However managing director, John Startari, says the whole experience was a pleasant surprise. "When you get people like Mark Skaife commenting on how good our car is, that's been beneficial," he says. "We are happy to sign on for the next series." Apart from Skaife, Startari appreciates the feedback from the other celebrity drivers who have completed the track drive. The Top Gear Satria has sailed through its various track challenges without missing a beat, apart from a few minor scrapes. "Again, that's good news," Startari says. Startari says that he was initially sceptical about supplying a 1.6-litre Satria for the show, based on the experience of the UK show, which used a Suzuki Liana and in recent episodes a Chevrolet Lacetti, sold here as the Holden Viva. "I was a bit concerned about how the car would be portrayed, based on how the UK show treats its car," he says. "But the producers reassured me that it would be fairly treated and used appropriately." But the positive exposure has been a good thing and is helping Startari build the case for a GTi version of the Satria. With the aide of Top Gear, Startari is keen to reignite interest in a Satria GTi and get them into showrooms next year. "We also want to leverage our Lotus relationship after we build some market share," Startari says. But Startari says the company needs the right engine, whether it be a four cylinder turbocharged unit or high-performance naturally aspirated engine. The company showed off a tricked up Satria "Desire" concept at the Sydney Motor Show two years ago but until recently progress on the GTi had stalled. The Top Gear exposure may have been just the ticket to kickstart discussions with Malaysia and get the car back on track.  

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 Exora has just been unveiled in Malaysia, and will come to Australia, but it's the mechanical package under the family wagon which provides the real breakthrough.It will be spun in a number of directions, including an all-new Persona family car.Talk from Malaysia also points to a potential successor to the Jumbuck ute, which has been a rare success for Proton in Australia, as well as the company's first station wagon.There is no confirmation of the extended model plan, but Proton Cars Australia is already looking at the potential for the Exora down under."The Exora will come. We're evaluating it and seeing how we can get it here, in what form and what pricing," says Proton chief John Startari, who was in Malaysia last week."It would be our first seven seater, so we need to check the positioning. It would need to be under $25,000 and the timing depends on negotiations on pricing and the market study. It would be next year at the earliest."In Australia we don't have the small people movers that work in Aisa.It would be interesting to see if there is an opportunity."The biggest shortcoming in the Exora is the baby 1.6-litre Campro engine which restricts almost everything the Malaysian company makes.It is fine for home sales but barely adequate for export use in countries like Australia.Startari refuses to talk specifics on the Exora's mechanical package but admits Proton is looking at ways it can exploit the latest engineering development."The plan is to rationalise the number of platforms. There are currently six from the Jumbuck to the Exora," he says."The new platform is the first one since the Satria, which came after the Savvy."Proton sales in Australia have been hit badly in recent months but Startari says is developing a plan to give the brand some renewed impact."I have to admit that we're down considerably. But we're preparing to work through the dealer network, moving from 25 back up to 40 in coming weeks," he says."That will give an immediate sales boost. And then we are planning to release a new small five-door model."That car will be coming in August, but I don't want to say too much yet. We have to get everything locked away."It has just been unveiled in Malaysia, and will come to Australia, but it's the mechanical package under the family wagon which provides the real breakthrough.It will be spun in a number of directions, including an all-new Persona family car.Talk from Malaysia also points to a potential successor to the Jumbuck ute, which has been a rare success for Proton in Australia, as well as the company's first station wagon.There is no confirmation of the extended model plan, but Proton Cars Australia is already looking at the potential for the Exora down under."The Exora will come. We're evaluating it and seeing how we can get it here, in what form and what pricing," says Proton chief John Startari, who was in Malaysia last week."It would be our first seven seater, so we need to check the positioning. It would need to be under $25,000 and the timing depends on negotiations on pricing and the market study. It would be next year at the earliest."In Australia we don't have the small people movers that work in Aisa.It would be interesting to see if there is an opportunity."The biggest shortcoming in the Exora is the baby 1.6-litre Campro engine which restricts almost everything the Malaysian company makes.It is fine for home sales but barely adequate for export use in countries like Australia.Startari refuses to talk specifics on the Exora's mechanical package but admits Proton is looking at ways it can exploit the latest engineering development."The plan is to rationalise the number of platforms. There are currently six from the Jumbuck to the Exora," he says."The new platform is the first one since the Satria, which came after the Savvy."Proton sales in Australia have been hit badly in recent months but Startari says is developing a plan to give the brand some renewed impact."I have to admit that we're down considerably. But we're preparing to work through the dealer network, moving from 25 back up to 40 in coming weeks," he says."That will give an immediate sales boost. And then we are planning to release a new small five-door model."That car will be coming in August, but I don't want to say too much yet. We have to get everything locked away."