In the first year since assuming the role of chief executive officer at Proton, Dr Li Chunrong has focused on various initiatives to bring the national carmaker back to the heights of glory that it once attained. As you’d expect, this isn’t an easy responsibility to undertake.
There are many aspects that demand attention, which have been stipulated in the 10-year plan that has been laid down to bring Proton to the forefront. Among them are two standouts that are clear for all to see: the introduction of the company’s first-ever SUV, the Proton X70 that will be launched soon, and the upgrade of over 100 dealerships to 3S/4S centres this year.
However, behind the scenes of Proton’s operating and brand management, there are other things that have changed. Company policies, long-standing business practices from before, expectations placed on vendors and suppliers, and many more, all have be done to achieve one goal – improving the overall quality of Proton’s product line-up and regaining customer confidence in Proton. And, this is what Proton needs at this point.
To find out more about the planning and ongoing efforts, we had the opportunity to sit down with the man of the hour for an interview recently at the Proton Centre of Excellence. What can we expect from Proton moving forward? We direct the questions to Dr Li himself.
The Proton SUV will be launched soon, with bookings already exceeding 10,000 units up until now. Is this a good development for Proton? What contributed to this warm reception (of the SUV model)?
We began order taking of the X70 first in September this year. At the time, it was conducted only at physical showrooms only. A month later, in October, we started taking online bookings. That was a new method for us, and the first time it has been done in Malaysia by any manufacturer. However, this method is common in China. Looking at the response we received, customer awareness towards the X70 and Proton is now higher.
Once the official launch takes place, will there be units ready to be delivered immediately to customers who made a booking? How will Proton plan to handle this matter considering the X70 is (initially) a CBU model from China?
No, the handover will be done in stages. Once launched, we will make sure the number of units ready is enough to maintain the momentum in the market, balancing between supply and demand accordingly, as well as shortening delivery times. Those who placed their booking early will be given priority. The feedback from the bookings made gives us the advantage to plan the distribution rate of the model for the local market.
The Proton X70 as we know, is a model based on the Geely Boyue. What are the processes required to prepare the model for the Malaysian market?
On the one hand, the X70 isn’t a “rebadged” model as widely understood. Chiefly is the switch from left-hand drive to right-hand drive. This process isn’t as easy as switching seating positions only, as it involves transferring five main vehicle systems, with 20 components that require modifications. About 500 Proton personnel were involved in the project and are currently working at Geely’s plant in China. The time it took to complete the project was one and a half years. Now, the X70 is ready to enter the local market.
Proton previously announced that the locally-assembled (CKD) version of the X70 will be introduced later, replacing the CBU model that is being marketed first after its launch. What are the differences we can expect from the CBU model? Will the new 1.5 litre engine co-developed by Geely and Volvo be offered?
For now, there’s still a lot of work that must be done to ensure the introduction of the X70 CBU runs smoothly. In that regard, we will focus on the matter at hand first. A CKD version is definitely planned, but it isn’t time for us to reveal anything about it. Currently, the X70 is the priority for the market.
Is there a possibility that the X70 will emerge as a seven-seater later?
It isn’t included in our existing plan but it can be considered later. Since the X70’s body design is rather big, it’s not impossible to introduce (a seven-seat version) here, if there is demand from the market.
The naming approach taken with Proton models is completely different starting wit the X70 when compared to previous models like the Saga, Persona, Iriz and others. Will this approach be retained and will the names of existing models be changed as well?
Starting with the X70, the new naming approach for future Proton models will follow this latest method; it becomes like a sign for the transition of Proton’s products. However, for existing models, their names will be retained. This is because many are already familiar with the names, and we have no intention to change them.
After a year as CEO of Proton, what are some of the challenges you’ve faced? Do you understand the intricacies of the market here? Can you share your observations?
The most critical challenge I had to face is the total sales volume of Proton vehicles that have diminished when I joined the company. That’s a very difficult situation. With 30 years of experience in the operation of different automotive industries and my involvement in the joint venture (JV), I’m trying to reestablish Proton’s path.
From my observations, the market here has different demands and is of a much smaller scale compared to China. The prices of cars here are also higher compared to China, and the lifespan of a model is much longer here. So, based on these inputs, Proton will plan its way forward.
Among the goals of Geely’s joint venture is to restore Proton as the leader of the local market. How will this be achieved?
When I took up the responsibility, the Proton-Geely deal included a 10-year plan to be achieved. Indeed, for now, we only the new X70 as the first model to come out of this joint venture.
Recognising the SUV segment as a large and popular one in Malaysia (compared to sedans and compact hatchbacks), Proton will enter segments with potential that it wasn’t represented in before this. Therefore, among the steps taken is to introduce one new model every year, for different segments. This doesn’t include improving existing models, and certainly to increase the annual sales volume of Proton vehicles here.
What about the export market?
In 2017, we exported 248 units. In 2018, around 1,700 units will make their way out of Malaysia. With the support of the Malaysian government, we are targeting to export about 3,000 to 4,000 vehicles over the coming years. This is still being worked on.
One of the key factors to regain customer confidence is improving the quality of products and customer service provided by Proton. How has the development been so far?
As many are aware, Proton is actively upgrading its dealer network to 3S/4S centre. This is for customer satisfaction, and we are close to hitting our target for this year. Secondly, the quality of the product itself. For the whole year I was here, Geely’s internal audit team have been here three times for evaluations.
With the same internal demerit rating system used by Volvo, Proton, which recorded 6,680 points in October 2017, has now reduced the figure to 1,574 points as of October 2018 (higher points earned equals worse). Within a short period of time, this is something we are proud of, as we originally aimed to hit 1,500 points.
How do you deal with the perception that Proton is now a Chinese company, and no longer a company that’s more closely associated with Malaysians?
That’s totally incorrect. If there is any change in this context, Proton hasn’t turned into a Chinese company, but a multinational company. Why do I say that? It’s true that Geely has an interest in Proton but in terms of operation, it is not as you’d expect.
I’ll give you an example. At the Tanjung Malim plant, we have three Japanese engineers who head the operations there. Proton’s chief financial officer is a Canadian national. The design and styling department has British and French individuals who are also involved in providing input. Similarly, a few German and Indian nationals with their respective expertise contribute equally.
Our goal is singular: to improve Proton’s condition and restore it to its respected position as before. All these things we’ve discussed – and many other aspects of course – are the changes that are necessary to achieve that goal.
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