Proton is the flag carrier of Malaysia when it comes to car manufacturing. That is because the company is the biggest and so far one of the most successful firms that entered into the foray of global car assemblers.
As a company, the company was established in 1983 as a state-controlled business. The name Proton is a shortened version of the Malaysian name Perusahaan Otomobil Nasional, which in English translates to National Automobile Enterprise. The company was established under the government mandate of then Malaysian Prime Minister Tun Mahathir Mohamad.
Initially, Proton cars were manufactured based on the car assembly and technology owned by Japan's Mitsubishi Motors. The first Proton car model was called Proton Saga and was launched into the market in 1985. All the major components and parts of the Proton car were made wholesale by Mitsubishi. However, on the succeeding car models, Proton made sure that it sourced parts from local and other sources, apart from components that itself designed and made.
Proton cars have enjoyed warm market reception and were highly patronised in the home market. In the year 2002, it was estimated that Proton dominated the Malaysian car market by accounting for 60% of local car demand. However, as figures reveal, market share of the company has been declining as car imports start invading and snapping away market share from the car manufacturer. In 2005, Proton only commanded 30% of the market share. It is estimated that by 2008, Proton's car market share would further deteriorate and drastically plunge to indecent figures as free trade agreements mandate the reduction of tariff on car imports to just 5% at the most.
However, the company has made sure that it is not reliant on its home market. Proton anticipated that it would soon face fierce competition even at its home market. Thus, it started importing its flagship car models in several offshore markets like Australia, South Africa and the United Kingdom. Proton has even started to bring its car brand to the Middle East.
What is good about Proton export is that the hand-drive of the cars is customised according to needs. For example, Proton exports to the United Kingdom are right-hand drive cars, while those sold in New Zealand, Australia and Singapore are left-hand drive.
Because the overwhelming trend of consolidation and cooperation among players in the global car industry, Proton has also entered into partnerships with other offshore manufacturers like Germany's Volkswagen AG. The strategic partnership agreed upon by the two in 2004 has resulted in the development of more Proton cars and models with superior performance and features.
The company has also used its strong financial position to takeover some car assets like the Lotus Group International and Italy's MV Augusta. It is really evident that Proton is bent on improving its position as a global carmaker. The nationalistic values of Malaysians are also embedded in the car logo and designs.
Just like other giant car manufacturers, Proton has also expanded into other services that are apart from car assembly. The company now operates the Proton Holdings Berhad, which is in investment or holding firm that covers the financial market.
Original Authors: Manny
Edit Update Authors: M.A.Harris
Updated On: 10/06/2008