proton exora
TRANSCRIPT
PROTON Holdings Berhad
1.0 INTRODUCTION
1.1 CORPORATE INFORMATION OF PROTON
Brand is the most valuable asset for all the companies in any group. It embodies a
unique set of perceptions about products and services that are triggered in the
minds of public by how others judge what they do, how they behave, and what
they say.
A strong and well-managed brand at every point of contact with customers and
business associates provides the cues that distinguish PROTON from their
competitors. It helps people to know PROTON better and support their corporate
vision.
1.2 HISTORY OF PROTON
Perusahan Otomobil Nasional Berhad (PROTON) was incorporated in May 7,
1983 to manufacture, assemble and sell motor vehicles and related products,
including accessories, spare parts and other components. PROTON produced
Malaysia's first car, the PROTON Saga, commercially launched on July 9, 1985
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by then Malaysian Prime Minister, Dato' Seri Mahathir Mohamed, who had
originally conceived the idea of a Malaysian car.
Its model line-up includes the Waja, Satria GTi, Wira, Iswara, Arena, Perdana V6
and Juara. The range of 1.3, 1.5, 1.6, 1.8 and 2.0 litre engines satisfies a wide
spectrum of customers both locally and abroad. PROTON's main plant in Shah
Alam, with an area of 923 900 sq metres, was originally designed for a capacity
of 80 000 units per year. In 1997, capacity increased to 230 000 units per year
with the construction of the Medium Volume Factory, which is next to the Main
Plant. Today, the Shah Alam factory is capable of producing 240 000 vehicles per
year.
Besides being shareholders, Mitsubishi Corporation and Mitsubishi Motors
Corporation are also PROTON's technical assistance partner and component
supplier. PROTON has a total of 11 subsidiaries and 11 associate companies,
which are involved in manufacturing, research and development, sales and
service activities.
December 30, 1996, marked the launch of the PROTON Putra, a two-door coupe,
as well the production of our millionth car from the Shah Alam plant. PROTON
made a major step in upgrading its engineering capabilities with the acquisition
of Lotus Group International Limited, a British automotive engineering company
and manufacturer of luxury sports cars in October 1996. Together, PROTON and
Lotus offer large scale manufacturing capabilities with world-class engineering
expertise.
PROTON cars are making their mark internationally as competitive and
innovative automobiles. They are now being exported to 50 countries including
the highly competitive United Kingdom and continental European markets. With
concerted and unswerving commitment from customers, business associates,
shareholders, government agencies, and employees, PROTON is realising its goal
of being an internationally successful Malaysian automotive manufacturer. It is
achieving this by being customer oriented and by producing competitively priced
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and innovative products. Thus, it is contributing to Malaysia's attainment of
Vision 2020.
With solid base built up over the last 10 years, Malaysia's car manufacturing
industry is progressing vigorously.
Below are some of the important events that led to the incorporation of Perusahan
Otomobil Nasional Berhad (PROTON) and its achievements. And it selected for
5 years started on 1985 until 2010.
1985
PROTON LOGOApplied to PROTON cars from 1985 until 1992. Models included are PROTON Saga, Magma, Megavalve.
July
Commencement of PROTON Saga's commercial production.
October
Launch of the Singapore market.
21 December
Official roll out of the 150,000th car and 10,000th UK cars send-off ceremony by Prime Minister, Dato' Seri Dr Mahathir Mohamad.
*Assorted of PROTON Logos
1986
01 January
Official rollout of the 10,000th PROTON Saga.
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February
First three Saga taxis on the road in conjunction with Federal Territory Day celebrations.
26 December
Bangladesh was the PROTON Saga's first export destination
1987
January
Market launch of the PROTON Saga 1.5I saloon model.
March
Market launch in New Zealand, Brunei, Malta and Sri Lanka.
June
PROTON Cars (UK) Ltd awarded distributorship for UK and the Republic of Ireland.
July
Launch of the Saga with the Magma engine.
26 September
Official rollout of the 50,000th car.
October
Market launch of the PROTON Saga 1.5 Aeroback model
1988
PROTON LOGOApplied to all PROTON cars from 1988 until 1999 and to all PROTON cars for export market.
February
Signing of distributorship agreement for the Jamaica market.
March
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Shipment of the first PROTON Saga to Ireland for European debut.
01 August
Kenji Iwabuchi appointed as PROTON's Managing Director.
08 September
Official rollout of the 100,000th car by Minister of Labour, Lee Kim Sai (now Tan Sri).
18 October
The PROTON Saga made its public debut at the British International Motorshow. PROTON won three Prestigious awards (two golds and one silver) for quality coachwork and ergonomics.
1989
16 March
UK market launch. EON launches PROTON Knight, a version of the Saga 1.5S Aeroback, with a daredevil driving demonstration.
October
Launch of the Singapore market.
21 December
Official roll out of the 150,000th car and 10,000th UK cars send-off ceremony by Prime Minister, Dato' Seri Dr Mahathir Mohamad
1990
January
Dato' Mohd Nadzmi Mohd Salleh made EON Executive Director.
16 March
o Ground-breaking ceremony of the Engine Machining and Transmission Assembly Plant at Batu Tiga, Shah Alam, by Prime Minister Dato' Seri Dr Mahathir Mohamad.o Presentation of the first unit of EON's PROTON Saga stretched limousine to Dr Mahathir.o Market launch of the Saga 1.5I automatic.
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16 May
Official rollout of 200,000th PROTON car.
June
PROTON began in-house engine assembly.
12 August
Launching of the PROTON Saga 12-valve (Megavalve) model for the domestic market.
September
EON's PROTON Saga Limousine launched by Dato' Seri Rafidah Aziz, Minister of Trade and Industry at Carcosa Seri Negara.
1995
07 April
PROTON Perdana launch by Dr Mahathir.
27 January
Sales launch of Left Hand Drive PROTON Wira in the Belgian market.
28 January
Sales launch of Left Hand Drive PROTON Wira in the Philippines market.
18 March
Opening Ceremony of PROTON Casting plant by Dr Mahathir.
08 August
PROTON Awarded "Most Outstanding Corporation" in R&D investment by the Minister of Human Resources.
28 October
Launch of the PROTON Perdana Executive by EON.
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06 November
Tan Sri Yahaya Ahmad appointed as Chairman of PROTON.
27 November
First Shipment of PROTON cars to Indonesia.
23 December
Launch of PROTON's 10th Anniversary Commemorative Stamps
2000
PROTON LOGOFirst applied to PROTON cars from 2000 until 2008. Models included: PROTON Waja, Savvy, Gen.2, Persona.
08 May
Soft launch of the PROTON Waja.
31 August
Sales launch of the PROTON Waja by distributors EON and USPD.
06 October
Prime Minister Dato' Seri Dr Mahathir Mohamad unveiled the prototype CamPro Engine at the Lotus Factory in Norwich, United Kingdom.
2005
26 February
Launch of the PROTON Tanjung Malim Plant by Prime Minister Dato' Seri Abdullah Ahmad Badawi.
April
PROTON awarded with the Reader's Digest "Super Brand Gold Award 2005" for its Car Category.
08 June
Launch of PROTON Savvy 1.2-litre by PROTON Adviser Tun Dr Mahathir Mohamad
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2008
PROTON LOGOApplied to PROTON cars from 2008 until now. Models included: New Saga, Exora.
09 January
ROTON debuted in China with Europestar RCR (Gen.2).
18 January
Launch of the new SAGA by Prime Minister Dato' Seri Abdullah Ahmad Badawi.
06 February
The Waja CPS enters the domestic market.
03 March
Launch of the Gen.2 CPS.
28 April
o PROTON awarded with the Readers Digest "Most Trusted Brand Gold Award 2008" for Car Category.o Frost & Sullivan Malaysian Manufacturing Excellence Awards 2008 awarded PROTON Shah Alam plant with the Silver Certificate of Merit.o Frost & Sullivan Malaysian Manufacturing Excellence Awards 2008 awarded PROTON Plant Tanjung Malim with the Gold Certificate of Merit. 08 April
Launch of the PROTON Persona in Brunei.
20 April
Launch of the PROTON showroom in Oman.
12 May
PROTON unveiled the PROTON Satria Neo Race Car for Asian Touring Series.
June
PROTON won the Full Colour Category in the China Press 2008 Chinese New Year Greeting Advertising Awards.
26 June
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Frost & Sullivan's 2008 ASEAN Automotive Awards awarded the Persona Best Model of the Year (Malaysia).
30 June
Persona and Satria Neo awarded the "Malaysia Good Design Mark 2007" by Malaysia Design Council (Majlis Rekabentuk Malaysia).
08 July
PROTON Saga awarded as the Best Compact - People's Car for Year 2008 by Asian Auto-VCA Auto Industry Awards 2008.
PROTON awarded the "Company that Made a Comeback in the Automotive Industry" by Asian Auto-VCA Auto Industry Awards 2008.
11 July
Launch of PROTON Persona at the Indonesian Motorshow.
02 August
Roll out of PROTON's 3 millionth car - a new SAGA - from the PROTON Plant in Shah Alam.
26 August
Launch of the PROTON Persona Special Edition.
31 August
Prime Minister Dato' Seri Abdullah Ahmad Badawi and wife, Datin Seri Jeanne Abdullah, arrived at Dataran Merdeka for the National Day Parade driving the Persona Electric car while Deputy Prime Minister, Dato' Sri Najib Tun Razak and wife, Datin Seri Rosmah Mansor, arrived driving the Savvy Electric car.
October
The PROTON Plant in Tanjung Malim won a Gold Certificate of Merit at the Frost & Sullivan Malaysian Manufacturing Excellence Awards 2008 while the PROTON Shah Alam plant won a Silver Certificate of Merit.
07 October
Launch of the PROTON Saga in Bangkok.
10 October
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Launch of the PROTON Saga in Brunei.
November
PROTON Saga – Winner for the Entry Level Category for the NST/ Maybank COTY Awards 2008.
24 November
Launch of the PROTON Persona in Cairo, Egypt.
05 December
Persona awarded the "Most Efficient Family Car by the Asian Auto Bosch Fuel Efficiency Awards 2008. award 2007" for Car Category.
2010
02 January
Petronas appointed as the sole lubricant supplier for PROTON vehicles in a 10-year agreement that covers all markets where PROTON cars are sold.
23 February
Visit by PROTON Adviser, Tun Dr Mahathir Mohamad, to the Lotus Racing Facility and Lotus Group in Hethel, UK.
02 March
Tun Dr Mahathir launched the EMAS concept car at the 80th Geneva International Motorshow.
18 March
A new, enhanced Persona (branded as Persona Elegance) which will replace the existing and successful-selling PROTON Persona is unveiled. The 1.6-litre sedan is available in Base, Medium and High Line variants.
30 March
PROTON Adviser, Tun Dr Mahathir Mohamad, launches the PROTON Satria Neo R3 Lotus Racing edition in conjunction with PROTON's involvement in Formula 1.
16 April
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PROTON becomes the title sponsor of the 2010 Thomas and Uber Cup finals.
08 May
PROTON awarded Labour Day Achievement Award for the category Competitive Employer Award (Big Corporations) in conjunction with 2010 Workers' Day Celebration presented by the Prime Minister.
12 May
o Frost & Sullivan Malaysia Excellence Award 2010 Best Passenger Car Model of the Year for PROTON Saga (fifth award) and Best Automotive Debut Model of the Year for Exora.o Reader's Digest Trusted Brand 2010 Gold Award for Car Category (7th award). 22 May
Introduction of the Enhanced 1.6-litre Gen.2
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PROTON Holdings Berhad
2.0 CHAPTER 1: TARGET CUSTOMERS
2.1 PROTON JOURNEY
One of the main objectives for the creation of Perusahaan Otomobil Nasional
Berhad (PROTON) was to propel Malaysia into the 21st century as an
industrialized nation, where the acquisition of technological knowledge, know-
how and expertise, would help the country achieve both short-term and long-term
goals.
As a strategic component of Malaysia's Industrial Master Plan (IMP), PROTON's
objectives include the development of indigenous research and development
capabilities, world class manufacturing and production standards, design
capabilities as well as a presence in the global market.
This continuous process of improvement and global competitiveness has
produced one of the largest pools of trained and talented engineers in Malaysia,
many of whom are specialized in diverse and highly-specialized areas including
automotive, materials and design engineering.
Using the resources, technology, innovations, manpower and design capabilities
either made available to or nurtured by PROTON, the national car project has
made a significant impact in the automotive industry.
The investment into developing research and design capabilities which includes
the expertise of PROTON's wholly-owned subsidiary Lotus Engineering UK, one
of the world's leading automotive engineering consultancy companies, has
provided PROTON with an invaluable resource which has helped place the
national car company at the forefront of the automotive industry.
2.2 The Nation's Automotive Project
In the process of building a dynamic, daring and innovative new marquee in the
world of automotive manufacturing, PROTON has created thousands of
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employment opportunities - both directly and indirectly in various support
industries, worth billions to the national economy.
In the fast-paced, competitive of automotive manufacturing, the ability to
maintain a competitive edge makes all the difference between success and failure.
With this in mind, from 1997, PROTON began preparing for the future by
boosting its Research & Development capabilities. Today, thanks to intensive
R&D, it is a fully-fledged automotive manufacturer capable of designing and
producing its own car platforms, bodies and engines.
2.3 Industry Overview
The aftermath of the global economic crisis to batter the global automotive
industry, especially in the United States, where we saw several iconic brands
reduced to mere chapters in the annals of automobile history. Although not as
dramatic, the Malaysian automotive industry suffered a worryingly lacklustre
start to 2009. Thanks to the immediate and proactive action by the Government
of Malaysia, the Second Stimulus Plan, which was announced by the Prime
Minister YAB Dato' Sri Mohd Najib Tun Razak in March 2009, ignited the
resuscitative spark.
2.4 Produce Hot / Killer Product
Knowing what the market wants is one of the first key factors to determine the
performance of the company. In the automobile industry, while others are trying
to cater to local requirements by adding accessories to their global models,
PROTON has the above hand as it can specify to the needs right during the
drawing board stages. But of course building cars are not like kite making, and
thousands of parts from hundreds of vendors must be designed, controlled and
manufactured. Malaysians are proud that they are a part of the very exclusive car-
building nations.
The PROTON Exora is the brand’s first foray into the MPV segment. This
category has become a boom in the ASEAN region; with Toyota starting out the
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craze with its Avanza and now Nissan has joined in with its successful Grand
Lavina. Budget MPVs, small or medium in size with attractive pricing seems to
be the right recipe and PROTON has good models to study from. Starting from
the recent Saga, PROTON has found what it can succeed in, building affordable
cars for the people. The Saga is terrific car, compact exterior but stays large in the
inside. It is a sedan, thus we get a proper boot and the 1.3L engine is both frugal
and powerful. It is the most practical car in the market for anything below
RM45,000. Engineering wise, the Saga sets a standard for PROTON. Using
existing platforms and sharing many components with other models allow
PROTON to price the Saga competitively. There is nothing wrong with parts bin
sharing as the German and Japanese giants have been doing it for ages. The
Exora will also be sharing the technologies with the other PROTON models.
While cosmetic parts can stay the same, technical components have been
reengineered to meet the higher demand of an MPV.
PROTON Exora is clearly another great milestone for PROTON. Based on a
completely new chassis, the Exora is also the first wholly “Malaysian Made”
MPV from concept to design, engineering and manufacturing. The Exora
received huge attention even before its public unveiling, stirring a vast interest
among Malaysians who anticipated the arrival of their very first homemade
MPV. The 2,500 bookings received before the official launch is a testimony to
this. The overall booking has surpassed 11,500 now, just one and half months
after its official launch.
There has been a lot of effort put into the development of the Exora, including the
technology that comes with it. Hydroforming Component, Composite Front End
Module, Body Control Module, Lightweight Body Crashworthiness and many
more are some examples of the new technology used. PROTON made full use of
its 'lateness’ and has emerged with a model that is innovative and also has the
Lotus DNA which has given it a noteworthy ride and handling. Safety is a top
priority to all carmakers and with the Exora, a greater effort than before has been
placed in this area.
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PROTON Holdings Berhad
With the Exora, PROTON has proven that its success is not only in producing
cars but also in developing a pool of capable and experienced engineers and
skilled workers in the Malaysian automotive industry. Come and listen on how
PROTON turned the impossible to reality, with just 18 months from design
freeze to production. You’ll be amazed it!
2.4.1 PROTON Exora Strong Shell
There are many things that have done by PROTON to make sure the Exora is differing from other PROTON models. Some of the factors has been designed, and manufactured by the PROTON will be discuss it below:
Inside sub frames are designed to withstand greater side-impact forces. The Exora is expected to achieved a high 4-star plus in the European New Car Assessment Program (Euro NCAP)
The High-Line version gets two front airbags, and they are coupled to the seat-belts pre-tensioners.
The headroom in the Exora is also given priority. While most budget MPVs target small built Asians, the Exora must also cater to the other markets. Therefore, the Exora easily fits adults more than six-feet tall.
Since the day of Waja, PROTON has always out emphasis on a strong body shell. The Exora’s monocoque chassis is one of the stiffest for an MPV. A strong body that flexes less means the MPV will be a safer and quieter place to ferry the passenger.
New materials are used to allow lower kerb weight. Super high-tensile steel, which uses hydro-forming technology, is utilized for the front sub-frames. This to ensure light body weight and a better crumple zone. A new composite sub-frame is also used at the front to reduce weight. This technology has been used in premium vehicles but rarely for vehicles in this price range.
Sleeker side profile and good dampening material are used to ensure the cabin stays quiet. In the Exora, the third row passengers will be able to hear what the driver says. No shouting is needed.
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The newly designed side mirror gets build-in LED side repeaters. Electronic motors help you to adjust or fold it flat but most importantly; PROTON has managed to keep the wind noise low. This is good thing because side mirror contribute to 50 percent of the wind noise in a vehicle.
The Macpherson struts at the front provide a comfortable ride. Tuned with the help of Lotus, the system also works to reduce body roll, a major problem in most MPVs. Normal hydraulic powered steering is used as it gives the best steering feedback and turning radius (5.3m) is very car-like of an MPV as large as this.
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3.0 CHAPTER 2: COST
The aftermath of the global economic crisis continued to batter the global
automotive industry, especially in the United States, PROTON saw several iconic
brands reduced to mere chapters in the annals of automobile history. Although
not as dramatic, the Malaysian automotive industry suffered a worryingly
lacklustre start to 2009.
PROTON thanks to the immediate and proactive action by the Government of
Malaysia, the Second Stimulus Plan, which was announced by the Prime Minister
YAB Dato’ Sri Mohd Najib Tun Razak in March 2009 ignited the resuscitative
spark.
By July 2009, the monthly Total Industry Volume (TIV) was already showing
very positive signs of recovery and the industry performance in the last quarter of
2009 outperformed the corresponding period in 2008 by a whopping 18%,
closing the year with an annual TIV of 536,905 units, just 2% shy of the 2008
TIV but surpassing even Malaysian Automotive Association’s (MAA) revised
forecast of 500,000 units by a commanding 7%.
The momentum from the last quarter of 2009 continued in 2010 and the numbers
thus far have simply been record breaking. The recorded TIV for the months of
January to March 2010 are, 33%, 9% and 25% higher respectively than they were
in the corresponding months of the previous year and an encouragingly superior
22% compared to the same quarter last year.
Nevertheless, despite a marginal shrink of 2% in the TIV (all vehicles and
passenger vehicles), PROTON recorded a commendable increase in market share
in both categories; from 25.9% in 2008 to 27.6% in 2009 (TIV all vehicles) and
28.5% in 2008 to 30.4% in 2009 (TIV passenger vehicles).
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TIV all vehicles (%) TIV passenger vehicles (%)
2008 25.9 28.5
2009 27.6 30.4
PROTON Holdings Berhad
3.1 Cost Concept
Cost of production refers to the expenses incurred by the PROTON in producing
a particular quantity of output. There are different concepts of costs such as
implicit and explicit costs, opportunity cost and social cost.
For the PROTON the cost concept is explicit cost because it included the both
economic and accounting costs. For examples are wages and salaries to workers,
electricity power, and machinery and also the equipment that use in production.
3.2 Financial Performance
For FY09/10, PROTON Holdings Berhad posted a consolidated profit before tax
of RM261 million, which is a marked improvement compared to the loss before
tax of RM319 million in the last financial year.
Despite a contraction in the TIV, revenue for the year ended 31 March 2010 grew
by 26% to RM8.23 billion compared to RM6.52 billion posted in the last
financial year. This performance was the result of encouraging sales recorded by
three core models – the Saga, Persona and Exora.
The marked improvement in performance is also a result of cumulative initiatives
launched by the Management over the last few years, which included amongst
others, enhancing product portfolio, tightening cost management, ensuring
manufacturing efficiency, improving quality and strengthening the automotive
ecosystem through dealer and vendor consolidation initiatives.
Additionally, PROTON’s cash and cash equivalents recorded an increase of 79%,
up to RM1.6 billion and this augurs well for the Group as cash resources are
required for continued investments in the development of newer, better and
greener products.
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It shows an improvement revenue started from 2008, RM5,621.6 since decreased
in 2007, RM4,687.3. This is mean that PROTON has started with new plan to
make an improvement in their production. And this improvement continuously
improve until 2010, RM8,226.9. However the below table 1 is a summary of the
financial highlight for Five Years in PROTON Holding Berhad.
Income Statement for the Year Ended 31 March
RM’ million 2010 2009 2008 2007 2006
Revenue 8,226.9 6,518.7 5,621.6 4,687.3 7,796.9
Profit/(loss) before taxation 260.9 (319.2) 144.3 (618.1) 18.0
Profit/(loss) after taxation 218.9 (301.8) 184.6 (589.5) 46.7
Retained earnings attributable to shareholders
4,372.8 4,174.5 4,476.2 4,319.2 4,963.6
Dividend paid - (20.6) - (27.5) (54.9)
Retained earnings carried forward
4,372.8 4,153.9 4,476.2 4,291.7 4,908.7
SHARE INFORMATION
Per share
Basic earnings/(loss) (sen) 39.9 (54.9) 33.6 (107.3) 8 .5
Dividend paid (sen) - 5.0 - 5.0 10.0
Net assets (RM) 9.71 9.29 9.87 9.52 10.69
Issued share capital (‘000) 549,213 549,213 549,213 549,213 549,213
Table 1: Summary PROTON Financial Highlight for Five Years
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2010 2009 2008 2007 2006-1,000.00
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
Income Statement Year Ended 31 March
Revenue Profit /Loss Before Tax Profit / Loss After Tax
RM' M
illio
n
Chart 1: Comparison in five years for Revenue, Profit / Loss before and after Tax
Malaysian carmaker Proton Holdings Berhad has reported increased profits for
the first quarter of its financial year, largely thanks to its entry into the compact
MPV segment. Pre-tax profits for the three months ending June 30 rose 9.7%
year-on-year (y-o-y) to MYR64.38mn (US$18.25mn), compared to MYR58.7mn
(US$16.64mn) in the same period of the previous year. Despite a 2% drop in
volume sales, revenues rose 8% to MYR1.85bn (US$524.57mn) from
MYR1.71bn (US$484.87mn) last year. Proton attributes the improvement to a
better product mix following the launch of the Exora.
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Balance Sheet of PROTON for Five Years
Balance Sheet as at 31 MarchRM’ million 2010 2009 2008 2007 2006
NON-CURRENT ASSETS
Property, plant and equipment 2,624.4 2,827.1 3,150.4 3,169.5 3,302.9
Prepaid land lease payments - - 24.1 9.9 10.0
Goodwill 29.0 29.0 29.0 29.0 29.0
Intangibles assets 564.0 431.7 275.2 169.1 18.0
Associated companies 152.6 158.4 165.4 169.8 160.4
Jointly controlled entities 202.6 195.6 192.7 223.6 245.3
Investments - 10.4 10.4 10.4 10.4
Deferred tax assets 15.0 5.7 - - 105.8
3,587.6 3,657.9 3,847.2 3,781.3 3,881.8
CURRENT ASSETS
Inventories 1,227.2 1,395.1 1,100.3 1,273.6 1,389.0
Receivables 991.6 1,080.3 1,099.0 1,192.0 1,244.0
Current investments 9.7 15.3 20.8 73.4 212.0
Deposits, bank and cash balances 1,652.1 913.9 1,226.0 626.5 1,586.0
3,880.6 3,404.6 3,446.1 3,165.5 4,431.0
Non-current assets held for sale 36.9 36.4 - - -
TOTAL ASSETS 7,505.1 7,098.9 7,293.3 6,946.8 8,312.8
Table 2: PROTON Balance Sheet for Five Years
3.3 Dividends
On the back of a significantly improved FY09/10, the Board of Directors of
PROTON recommends the payment of a First and Final dividend of 20 cent per
ordinary share of RM1.00 each less tax at 25% on 549,213,002 ordinary shares
amounting to RM82, 381,950 in respect of the financial year ended 31 March
2010, subject to the approval of PROTON Shareholders at the Company's
forthcoming Annual General Meeting.
3.4 Reduce Cost of Production
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PROTON and LG (Lotus Group) engineers have added a few new features that
while are common practice for car manufacturers these days, are new for
PROTON cars. First we’ll have a look at the Front End Module. It is essentially a
single module for the front end of the car that is made of a combination of
composite resin/high grade plastic and metal in certain areas to reinforce it. It
serves as the front end structure as well as integrates the heat and fluid system
mounts, bumper mounts and lighting system mounts.
The benefits for a front end module according to PROTON are weight reduction
(it weighs 5kg versus 6.5kg for a regular module), higher control of quality
(single supplier), lower cost, ease of assembly (from 40 process down to 2
process), and provides a better fine-tuning ability for the crumple zone. It only
uses 5 parts instead of 12 major parts of a conventional module.
Next is the hydro formed front sub frame, which essentially carries the engine.
Hydro forming is a process which shapes the front sub frame using water
pressure. Water pressure shapes tubes by expanding them from the inside in a
closed forming die. It improves strength and rigidity, reduces weight (by 12% in
this case), consolidates the stamping process, and most importantly involves
much less welding points (eliminates weld flanges) for a stronger overall
construction. Die costs are down 60%, product costs down 20% and weight down
30%.
3.5 Budget Utilizations
3.5.1 Sharing Platforms/Part
PROTON has always had this problem. The high development cost of
vehicle platforms. Vehicle platform and engine technology are some of
the main reasons that they need a technical tie-up. Whether it is to share a
platform with an existing manufacturer, or sell their own platform to
recover some of the development cost, the world economy is just in too
much of a crappy condition for PROTON to have so many platforms.
The new direction of the future in terms of vehicle platforms for
PROTON is a two platform strategy. One large platform, and one smaller
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one. We now have these two platforms, and all that needs to come next
are the cars built on these platforms in order to plug the holes in the
market that PROTON has been leaving void.
The small platform is the PROTON Saga platform. With small platforms
that typically underpin cheaper cars, you can go for volume. That means
fewer models based on the platform, but more cars sold, which helps
bring up the numbers. Companies like Toyota can even do better, its small
platforms can spawn so many models, and I’m not only talking about the
“same chassis different body kit” JDM models.
Enter the large platform, the PROTON Exora’s platform. It was
developed by PROTON and automotive consultancy LG CNS, with the
specifications and directions from PROTON.
It is quite a versatile platform, allowing it to be reshaped for different
kinds of cars. This allows better return on investment, more variants of
essentially the same or similar underpinnings with lots of parts sharing,
resulting in less units sold multiplied by many types equals to the large
volume needed to reduce costs and improve profit.
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PROTON Holdings Berhad
The easiest and quickest vehicle would be a commercial vehicle version
of the PROTON Exora. There is also potential for a PROTON Persona or
PROTON Perdana replacement model (an initial concept drawing from
PROTON shown above).
It has the option for both a torsion beam and multi-link rear, depending on
usage. All PROTON needs to do to create a CR-V type of vehicle is fit the
multi-link setup at the rear and install the all-wheel drive parts. Don’t
forget to raise the height too.
The next generation Persona can come with a torsion beam. A sportier
version, the future equivalent of the GEN2, can use the multi-link setup.
Stretch it a little and give it the multi-link as well, and you get a potential
new Perdana.
Because the engine bay can take engines from as small as a 1.3 litter
inline-4 all the way up to a 2.5 litter V6 or even an inline-5, and is already
ready to take a turbocharged Campro engine, I am indeed looking forward
to future product launches from PROTON. (an initial concept drawing
from PROTON shown above).
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PROTON Holdings Berhad
PROTON engineers have developed a really nice product. The PROTON
Exora is a true bargain at its price with the only downside being its low on
torque. But I think many people who just want something to lug their
family members around won’t mind it and will get used to it.
3.6 Improvement in PROTON Sales
In 2006, PROTON's sales dropped 30.4% from 166,118 in 2005 to 115,538 for
the Malaysian market, with a later report indicating a 55% fall of sales to 962.3
million ringgit, its lowest in at least seven years. This allowed Produa to overtake
PROTON as the country's largest passenger carmaker for the first time, with a
41.6% market share, while PROTON's market share fell from 40% in 2005 to
32% in 2006. In the period ending December 31, 2006, PROTON has also
suffered three consecutive quarterly losses. Compared to a profit of 86.5 million
ringgit in 2005, the car company lost 281.5 million ringgit in 2006. PROTON
blamed discounts from rivals. Total losses in 2007s financial year climbed to
$169 million.
The Employees provident Fund (EPF) acquired an additional 830,000 shares in a
transaction that spanned between January 5 and January 12, 2007. This mean all
Malaysian are shareholder of the national car maker.
As compared to PROTON, Produa has been quite successful in its business
ventures. Its cars are very popular among Malaysians, such as the Produa Myvi,
which sold 80,327 units in 2006, outselling its rival’s bestselling car, the
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PROTON Holdings Berhad
PROTON Wira then, which only sold 28,886 units in Malaysia. In 2006-2010,
Produa became the bestselling car company in Malaysia. In the first half 2011,
the table has turn upside down where a highlight of the figures was that
PROTON had overtaken Produa to be the best-selling brand this year. It’s been
many years since the first national carmaker has been No.1 and though part of the
reason was that Perodua’s supply in the second quarter was limited (due to
phasing-out of the old Myvi) and also the problems caused by the amendments to
the H-P Act, it has also to be said that PROTON’s current line-up is its strongest
ever and has drawn many customers, noted the core models PROTON Saga and
PROTON Persona. PROTON delivered 85,223 units to take a 28.7% share of the
TIV while Perodua delivered 79,467 units, a difference of 5,756 units.
PROTON Holdings Berhad registered a profit before tax of RM186 million in the
first half of its 2010/11 financial year benefitting from the improved market
sentiments and conditions which had accounted for a 13% increase in its vehicle
sales. The growing demand for PROTON vehicles were significantly contributed
by three core models; the Saga, Persona and Exora.
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PROTON Holdings Berhad
4.0 CHAPTER 3: COMPETITION WITH OTHERS MPVs
The market is an arrangement that facilitates the buying and selling of the
product, service, factor of production or future commitment. In other words, a
market is a place where the buyers and sellers meet one another to transact
business.
4.1 PROTON is Oligopoly Market Structure
Type of the market for PROTON is oligopoly because there are only a few firms
in the automotive industry. PROTON produces either identical or differentiated
products or the entry of any new sellers or MPV is difficult or impossible.
PROTON’s produce and sold the product is differentiated where the buyers can
choose or make comparison with other MPV.
Some of the characteristics for oligopoly market structure are:
There are few in number but large in size – the number of the firms is
small but the size of the firms is large. PROTON has large enough of
market share to dominate the market.
It’s homogenous or differentiated product – PROTON is oligopoly market
where the car produce is a differentiated product.
Mutual interdependence – PROTON always consider the reaction of their
rivals when choosing the price, sales target, advertising budgets and other
business policies.
Barrier to entry – firm in oligopoly will restrict new entrants into the
market and types of barriers are economies of scale, forces to merge,
ownership of patents and also the copyrights.
4.2 Short-run and Long-run Equilibrium for PROTON
A firm (PROTON) in the short-run or long-run will possibly to enjoy the three
types of profits which are:
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0
D
C
Profit
MC
B
A
Cost/Revenue
ATC
QuantityM
AR=MR
Loss
MC
B
A
Cost/Revenue
ATC
QuantityM
AR=MRD
C
0
PROTON Holdings Berhad
Supernormal Profit – the profit earned when total revenue (TR) is greater
than total cost (TC). It also can realize when the price (P) is greater than
the average total cost (ATC) and PROTON make profit. Also known as
Economic Profit.
Subnormal Profit – the losses incurred because the price (P) is lower than
the average total cost (ATC) or when total revenue (TR) is less than total
cost (TC), PROTON makes a loss. Also known as Economic Loss.
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PROTON Holdings Berhad
Normal Profit – is the profit necessary for the PROTON to stay in
business when total revenue (TR) is equal to total cost (TC) and where no
profit or loss incurred and PROTON at breakeven profit. This is required
PROTON to stay in the market.
The table below is the summary of Oligopoly market structure.
No Characteristics Oligopoly Market
1 Number of sellers Few
2 Types of product Homogenous / Differentiated
3 Entry condition Difficult
4 Control over price Some
5 Profit maximization MR = MC
6 Short-run equilibrium Subnormal, supernormal or normal profit
7 Long-run equilibrium Supernormal profit because of barriers to entry
8 Shut down Short-run AR < AVC, Long-run AR<AC
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MC
A
Cost/Revenue
ATC
QuantityM
AR=MRD
0
PROTON Holdings Berhad
4.3 The Comparison Price Exora and other MPVs
After a long time waiting, Malaysians finally have a decently sized MPV at a
decent price to choose from. The new PROTON Exora is here and come with two
categories are 1.6 litter automatic high-line and a 1.6 litter automatic medium-
line.
The table below shows the comparison price between PROTON Exora and other
MPVs in Malaysia.
List of Price for MPVs
EXORA 1.6L A/T M-
Line Metallic
RM69,998
1.6L A/T M-
Line Solid
RM69,548
1.6L A/T H-
Line Metallic
RM75,998
1.6L A/T H-
Line Metallic
RM75,548
-
LIVINA 1.6L A
RM88,600
1.6L M
RM84,600
1.8L A
RM97,300
- -
AVANZA 1.5 S - A
RM78,500
1.5 G - A
RM74,500
1.5 E - A
RM70,000
1.3 E - A
RM65,800
1.3 E - M
RM62,500
RONDO EX
RM86,088
EXS
RM90,088
- - -
INNOVA 2.0G Auto
RM 102,900
2.0G Manual
RM 97,900
2.0E Auto
RM 92,900
- -
4.4 The Spec Comparison between Exora and other MPVs
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PROTON Holdings Berhad
Other than price we also have to make a comparison before buying a MPV, are
the MPV’s specs. Specs also one of the most important to looked through, here I
have to address some of the facts about actual dimensions of the car, because
when we want to buy an MPV what are we looking for is the essentially a big box
that to fit in all the family members. There has been some revision to the data that
PROTON provided during the prototype test drive (particularly the weight, which
is now the heavier with 1422kg for M-Line and 1442kg for the H-Line).
Here are some of the final specs of the Exora in comparison to its popular
competitors such as Grand Livina, Avanza, Rondo, and not forget the Innova.
Exora Livina 1.6 Avanza 1.5
Rondo Innova
Kerb Weight 1,422kg 1,245kg 1,120kg 1,563kg 1,575kg
Length 4,592mm 4,420mm 4,150mm 4,545mm 4,580mm
Width 1,809mm 1,690mm 1,630mm 1,800mm 1,770mm
Height 1,691mm 1,590mm 1,695mm 1,650mm 1,755mm
Wheelbase 2,730mm 2,600mm 2,655mm 2,700mm 2,750mm
Track (F) 1,542mm 1,470mm 1,415mm 1,573mm 1,510mm
Track (R) 1,530mm 1,475mm 1,425mm 1,569mm 1,510mm
Fuel Tank 55L 52L 45L 55L 55L
Power (hp) 125hp 104hp 108hp 142hp 134hp
Torque (Nm) 150Nm 150Nm 141Nm 189Nm 182Nm
kg/Nm 9.48 8.3 7.94 8.27 8.65
The power figures above are quoted in horsepower, which has been converted
from most of the “PS” measurements that Japanese companies use. As we can see
the weight is now heavier, which would throw off all our previous calculations on
the Exora’s power to weight ratio.
The Exora’s 125 horsepower has to pull 1422kg of weight now which means
11.376kg per horsepower, which is actually one of the better performing numbers
among its competitors.
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5.0 CHAPTER 4: KEY TO SUCCESS
The Edge Magazine as always has a very interesting and revealing interview with
PROTON’s managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir.
The ex-Perodua man has been at PROTON’s helm for about 4 years now and I
think most of us are agreed that under his leadership PROTON has taken a turn
for the better position.
5.1 Managing Director PROTON: Dato' Sri Syed Zainal Abidin B. Syed
Mohamed Tahir
Dato' Sri Haji Syed Zainal Abidin B. Syed Mohamed Tahir, 48 years was
appointed Managing Director of PROTON on 1 January 2006. He also sits on the
Boards of various subsidiaries within the PROTON Group of companies.
Dato' Sri Haji Syed Zainal Abidin graduated with a Bachelor of Science in
Engineering from the University of Maryland, USA and began his career as a
Project Engineer with Petronas Gas Sdn. Bhd. in 1987, prior to joining Petroliam
Nasional Berhad in 1992 as the Senior Executive of Corporate Planning &
International Business Development. He then left to join HICOM Holdings
Berhad in 1995, where he assumed various senior positions in the company.
Dato' Sri Haji Syed Zainal Abidin was appointed as Senior General Manager of
PERODUA in 1999. Subsequently, he was appointed Executive Director of
PERODUA Auto Corporation Sdn. Bhd. in 2002, and in October 2005, promoted
to Deputy Managing Director.
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PROTON Holdings Berhad
In November 2008, Dato' Sri Haji Syed Zainal Abidin was named the
“Automotive Man of the Year” by the New Straits Times/Maybank Car of the
Year 2008 Awards for this strong management and leadership qualities in
steering PROTON by strengthening its position in the domestic market while
making significant breakthrough in the international markets. Most recently,
Dato' Sri Haji Syed Zainal Abidin received the International Business Leader in
Automotive Sector Award at the 2010 Middle East Business Leadership Summit
Awards, and the Masterclass Bumiputra CEO of the Year Award at the 2nd
Malaysia Business Leadership Awards 2010.
Dato' Sri Haji Syed Zainal Abidin has attended all Board of Directors' Meetings
held during the Financial Year. He has no conflict of interest with the Company
and does not have any family relationships with any Director and/or major
shareholder of the Company. He has had no conviction for any offences within
the past ten (10) years
5.2 Refreshing
This is the most important thing when Company decided to turn red into the
black on the paper (in term of LOST AND PROFIT-Financial Report). Dato' Sri
Haji Syed Zainal Abidin B. Syed Mohamed Tahir was appointed Managing
Director of PROTON on 1 January 2006. He also sits on the Boards of various
subsidiaries within the PROTON Group of companies.
Brought in to replace Tengku Tan Sri Mahaleel Tengku Ariff in 2006, Syed
Zainal had big shoes to fill. The flamboyant Tengku Mahaleel was a dominant
personality and had the backing of former Prime Minister Tun Dr Mahathir
Mohamad, who is an adviser to PROTON. Syed Zainal was an unknown before
he took over as managing director of PROTON. Then the Chairman Datuk
Mohamed Azlan Hashim and he managed to remove some of the old hats in
PROTON and chart new strategies for its growth. In fact, it was Azlan and Syed
Zainal who made the final presentation to the Cabinet two years ago when they
decided not to take on Volkswagen AG as a strategic investor. It was a decision
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PROTON Holdings Berhad
that did not go down well with PROTON’s major shareholder Khazanah Nasional
Bhd. Since then, Azlan’s term as chairman of PROTON has ended but Syed
Zainal has stayed on at the helm. Datuk Mohd Nadzmi Mohd Salleh is now the
chairman of PROTON.
Here are the some key points in the story under Datuk Mohd Nadzmi Mohd
Salleh as a new chairman of PROTON is:
Chinese automaker Youngman’s Europestar brand is building a new car,
engineered by Lotus. It uses components carried over from the GEN2.
Lotus is being paid about US$20 million for the work, and PROTON also
gets licensing for this new car’s platform once it rolls out.
PROTON’s new model investments will be in core models. Models with
lower volumes such as a Perdana replacement will be through
collaborations. There is no sense in spending half a million ringgit
investing in a Perdana when it will not get the kind of sales the Saga (5.5k
to 6k) and Persona (3.5k to 4k) currently gets.
The Campro’s lifecycle will end in 2014, after of which a new engine will
replace it. PROTON is currently looking at two different options, but is
still looking at other OEMs. They hope to decide where the new engine
will come from by next year.
PROTON will be consolidating its plants to Tanjung Malim in 3 years
time. The Shah Alam plant’s land can be utilised better than its current
use as it is appreciating in price now.
The Waja replacement model already sold this year. The Perdana will
come in third quarter 2011. Buyer will get an all-new global model to
replace the Persona in 2012. That would mean the Persona will be
replaced after a 5 year lifecycle (well, it’s longer actually if you consider
the Persona a GEN2). PROTON plans to continue a typical Japanese 5
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PROTON Holdings Berhad
year lifecycle for all its products, but this could go to 7 years (like
premium continue lifecycles) at most.
The new 2012 Persona replacement model will be styled by an Italian
company instead of PROTON’s design team led by Azlan Othman.
5.3 A New PROTON City
PROTON City is a township with industrial, commercial and residential activities
spread over 4,000 acres. Located about 5 kilometres north of Tanjung Malim,
Perak, Malaysia, it houses the state-of-the-art RM1.8 billion PROTON car
assembly plant. The PROTON plant has a workforce of more than 2,000 and
most of them are expected to live in the area.
PROTON City aims to be a self-contained eco-sensitive intelligent city with
superior technological and educational capabilities, while providing a
contemporary living environment that enriches its multicultural community.
To be fully developed by 2020, PROTON City aims to be home to Malaysia’s
automobile industry.
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PROTON Holdings Berhad
Key to map
- 8 km from Tanjung Malim Town
- 11 km from Tanjung Malim Interchange
- 81 km from Kuala Lumpur and 131 km from Ipoh
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PROTON Holdings Berhad
6.0 CONCLUSION
It must be appreciated that as the world moves more and more towards
globalization, rationalization and liberalization, companies and industries which
are not lean and streamlined will be mired by its uncompetitiveness, suffering
almost certain degradation and ultimately, limply bandied about in a high charged
industry until it is rendered obsolete and irrelevant.
“ PROTON's improvement in FY09/10 and more so, its growth in the past 25
years, is a clear message to the rest of the world that PROTON is more than just
a car company. PROTON is the realisation of the dream and the dogged
determination of a leader leading its nation from an agrarian-based economy
towards industrialisation. We are the personification of the collective pride of the
nation, powerfully driven by passion, and perseveringly focused on progress. In
spite of all the cynical criticisms, doubts and scepticisms, we have continued to
be the champion of the industry - and we intend to remain as the only one and
true champion of the national automotive industry.”
Quote from Dato’ Sri Nadzmi Bin Mohd Salleh
Chairman/Non-Independent Non-Execution Director
Dato' Sri Mohd Nadzmi Bin Mohd Salleh
PROTON Holdings Berhad
Last but not least, in a short run Exora has already proven PROTON has what it takes to be a good automotive company. Staying within its boundaries; PROTON gives more emphasis on practicality, luxury, and handling performance in the new MPV. However for the long term, PROTON will make sure that their product will go for the international market as a Tun Dr. Mahathir Mohammad said: “The time has come for PROTON to design a car not for Malaysia, but for the world market”.
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PROTON Holdings Berhad
7.0 REFERENCES
1. The Edge Malaysia, Issue 775, Oct 5-11, 2009
2. PROTON Holding Berhad Website
3. Gear Tinggi Automotive Blog
http://archives.thestar.com.my/last365days/default.aspx?query=PROTON
%20Holdings%20Bhd
http://biz.thestar.com.my/news/story.asp?file=/2009/8/19/business/
4545306&sec=business
http://www.btimes.com.my/Current_News/BTIMES/articles/pprot/Article/index_html
http://paultan.org/2008/10/14/toyota-gives-the-toyota-avanza-another-facelift/
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PROTON Holdings Berhad
8.0 APPENDICES
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