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.