Proton aims to lose cheap image, double overseas sales
Proton aims to lose cheap image, double overseas sales
Agence France-Presse, Kuala Lumpur
Malaysian national carmaker Proton hopes to lose its "cheap" image and double overseas sales this year, it said on Wednesday a day after reporting impressive annual earnings.
A spokesman for Proton said it was launching an aggressive campaign to boost exports and combat tough domestic conditions expected this year as foreign competition becomes more fierce in a liberalized market.
"We want to move away from this image that we sell cars that are cheap, or even cheaper than cheap," he told AFP.
"We want to offer more value, in products and servicing products. This is part of our move for globally accepted products and services."
Proton hopes to tap into potential new markets in Africa and Eastern Europe, and boost sales in Turkey and Saudi Arabia.
It announced late on Tuesday that net profits rose a higher- than-expected 58.8 percent in the year to March to 810.01 million ringgit (US$213 million) on the back of a 34 percent increase in sales.
Its British sports car manufacturer Lotus Group International recorded a pretax loss of 47 million ringgit in the financial year, mainly due to provisions for redundancy benefits arising from an internal reorganization in its engineering business.
Proton bought Lotus in 1996 and by the end of 2004 had also completed the acquisition of Italian motorcycle designer and manufacturer MV Agusta Motor Spa.
The national carmarker used to sell six out of every 10 new cars in Malaysia but growing foreign competition is eating into its market share, which fell to 44 percent in 2004 from 48 percent the previous year.
"The domestic motor industry, after experiencing a growth of 20 percent in 2004, is expected to record a lower growth and possible consolidation in 2005," it said in a statement.
"In addition, higher component costs and intense competition are expected to have an adverse impact on margins."
Proton is aiming to sell at least 100,000 vehicles abroad annually by 2008. Exports have doubled from 8,000 units in 2003 to 17,000 units in 2004, and it has set a goal to double overseas sales in 2005.
"To help achieve these ambitious export sales targets, Proton has initiated an aggressive campaign to penetrate new markets and will expand to 36 countries by the end of this current year," it said.
Proton cars are currently sold in 18 nations with the biggest export markets being Australia and Britain as well as Middle East markets and the 10-member Association of Southeast Asian Nations.
"The group will continue to focus on export growth, quality improvement, introduction of new models and efficiency improvement to mitigate the impact of a slowing domestic market and higher cost of raw materials," it said.