Preve faces stiff competition

TOP RIVALS: Japanese carmakers’ upcoming new models may affect sales of Proton’s latest edition, analysts say.


PROTON Holdings Bhd’s latest edition, the Preve, has the pedigree to be a success but faces stiff competition from
some foreign carmakers’ upcoming new models.

Analysts believe Japanese carmakers had recovered from supply issues from last year’s earthquake and tsunami and would soon launch new models that could affect Preve’s sales.

“The Honda and Toyota brands command loyal support here and it won’t be easy to swing their buyers to the Preve even if it ticks all the boxes,” said an analyst.

Honda is expected to introduce its new generation Civic here soon, while Toyota’s own C-segment model, the Altis, should follow suit after the bigger Camry makes its debut here in June.



Both Japanese carmakers have also been enjoying robust sales from their hybrid vehicles, thanks to lower tax offered for green cars.

Other carmakers have launched and are planning to introduce new models this year as well, and this could further affect Preve’s sales.

Proton is pinning its hopes on the Preve,which cost RM540 million to develop, to be a hit in the global markets.

The national carmaker projected sales of the new C-segment sedan to hit 4,000 to 4,500 units per month.

The Preve is also touted to be a gamechanging car for Proton which once, at its peak, held a 80 per cent market share but the
percentage has since tumbled to less than 30 per cent, despite tariff protections enforced by the government.

Proton’s net loss expanded to RM88 million for the third quarter ended December 31 2011 from a net loss of RM60.1 million reviously on weaker sales.

Group revenue in the period slipped further 21.8 per cent to RM1.43 billion from RM1.83 billion a year ago.

Analysts said much of Preve’s future lies in the hands of its new controlling stakeholder, DRB-HICOM Bhd.

Proton is now undergoing a takeover offer by DRB-HICOM, which intends to privatise the national carmaker.

The unconditional takeover offer by DRBHICOM to acquire all the remaining shares in Proton at RM5.50 each in cash will close on
April 25.

OSK Research said in a report that any synergies for Proton would largely depend on whether DRB-HICOM could bring Volkswagen into the picture and boost the utilisation rate of its Tanjung Malim plant.

Kenanga Research opined that DRB-HICOM's entry is expected to create business synergies between the automotive conglomerate and Proton via technology transfer, platform sharing and global distribution.

"With DRB-HICOM being involved in the whole integrated chain of automotive ecosystem, Proton can leverage on its distribution network and technology as well as help it to be a hub for hybrid, electric and environment-friendly vehicles for the Asean market," it said in a report.

DRB-HICOM's automotive complex in Pekan, Pahang, has assembled vehicles such as Mercedes-Benz, Volkswagen, Isuzu, Suzuki, Mitsu-bishi, Daewoo, SsangYong and Hicom Perkasa.