Published January 12, 2009

Proton plans to enter new markets every year

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(KUALA LUMPUR) Proton Holdings Bhd plans to enter new markets every year and sell more cars overseas as the domestic market is too small to help the national carmaker grow its business, its newly appointed chairman said.

Expanding: Proton which is already in 24 markets, is targeting India and countries in the Middle East and Africa next

'Proton has no choice but to expand (overseas). We are in the economical-class volume business. There is not much more that we can get as a second or third national car company. Body stamping and die are costlier and we have to go big volume to have better margins,' Nadzmi Mohd Salleh told Malaysia's Business Times.

The company has already entered 24 markets, including the UK, Iran, Australia, New Zealand, Indonesia, Singapore, Thailand, Egypt and China. The latter three are its biggest export markets.

Mr Nadzmi said that Proton is targeting India and countries in the Middle East and Africa next. 'We will concentrate on selective markets. The plan is to enter one or two new markets a year. But we are in no rush to do that. There must be good margins and long-term sustainability.

'We will definitely go into the difficult markets. What is bad for others is good for us. Today, the big boys are having bigger problems. For us, we have other problems but the scale is small,' he said.

Mr Nadzmi said that he expects Proton to face some pressure this year as foreign car firms offer various promotional packages to dispose of their old stock.

'The key thing for Proton is to reduce cost and increase sales. We have to make sure our car quality is excellent. I will look at the existing system and improve (on it) as quality is a moving target. If we can survive this period, we can take advantage of an economic upswing.'

Mr Nadzmi noted that although Proton has a presence in 24 countries, it sells fewer than 50,000 vehicles a year. This year will be very much dependent on its latest market, Iran.

From next month, Proton will start to assemble 50,000 units of the Gen.2 a year for the Iranian market through a completely knocked-down arrangement. It hopes to double that eventually.

Domestically, Proton sells about 150,000 cars a year. It was back in the black in the financial year ended March 31, 2008. It chalked up a pre-tax profit of RM162.218 million (S$68 million) compared to a pre-tax loss of RM618.129 million in the previous year.