Many were the sceptics when Li Shufu became the latest owner and part owner of Lotus Cars and Proton respectively. So far, and that includes the COVID-19 crisis, progress could be rated OK and excellent. Geely’s boss continues to invest in both, tasking the CEOs of these car makers to show him a pathway to sustainable profits.
Proton Cars
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Before the temporary collapse of the Malaysian market (March: -61%; April: -99.7%; May: data awaited), Proton was in the middle of a major comeback. January sales were up by 24% and in February, that improved to 25%, outperforming the market in both months. In fact, at the start of the 2020, the country’s national car maker was enjoying its best results in six years.
Provisional data show that in May, the brand not only rebounded by 73% compared to March (not the wipe out month of April), but its Saga small car became the country’s best seller. Brand registrations were 5,676 units, which was a 46.5% drop from the 10,611 cars sold in May 2019. Malaysians are still subject to an MCO (Movement Control Order) which has been again extended, this time until 9 June.
For CY2019, the brand enjoyed a 55% surge as overall vehicle sales in Malaysia ended the year up 0.9%. Of the 604,207 registrations (and 550,179 passenger vehicles), 100,183 were Protons. Daihatsu-controlled Perodua remained the biggest brand (240,341 and 40% market share) yet its own rise was only 5.8%.
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The extraordinary thing about Proton’s progress is that the influence of Geely (49.9% ownership) – in terms of new vehicles – hasn’t been extensive. Even so, the gap to third placed Honda has widened and encouragingly, Proton is talking a lot about exports, which is surely what it needs to do next.
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By GlobalDataThe best selling Proton is the Saga, deliveries rocketing by 90% in 2019 to 38,144 cars, followed by the X70 (26,331, and more on this SUV in a moment), then the Persona (21,876). In the context of one market, those numbers look good, and they are, but they’re also off a low base. Moreover, can there really be much profit in selling 100,000 affordably priced vehicles a year?
Aside from the Geely-based X70, the model range still contains some outdated vehicles which have to be sold at knock-down prices. Which is exactly what got it into big trouble in the past.
Malaysians aren’t going to continue buying technology from the 2010s or 2000s just because the vehicles are cheap. People in neighbouring countries aren’t going to either. What’s more, wanting to support a national champion won’t necessary apply for potential customers in Singapore, Brunei, and Thailand, the first three markets named by company CEO Li Chunron, as export targets for Proton.
Left-hand drive countries – specifically, certain ones in the Middle East – will be part of a second phase to push the brand beyond Malaysia and its neighbours. It remains to be seen if these vehicles will be made by Proton or instead manufactured in the PRC by Geely.
The X50 (provisional model name) should be added to the model line-up later this year. This 4.3 m long SUV would be Geely’s Bin Yui in right-hand drive form with new grilles and badges – the same changes made to the Geely Bo Yue to turn it into the Proton X70.
This model is part of Geely’s ambitious plans for Proton, which envisages reaching annual global sales volume of 500,000 units in 2027. The company revealed a new logo and a fresh tagline – ‘Inspiring Connections’ – in September 2019.
The ‘X50’ could be one of the main drivers for some 40% of that half million total to be sold outside Malaysia. This percentage was stated on several occasions by Li Chunron earlier in 2020, albeit before COVID-19 did its worst to the ASEAN region. Still, with focus and a lot of work, 2027 could be realistic, even if profit would surely be a better target than half a million cars sold annually.
Geely will have to negotiate with DRB-Hicom about who pays for what if the intention is to expand manufacturing capacity at Proton’s plants to 500,000/annum from what is at present a long way below that level. This is presuming that the brand is able to make aggressive inroads into already highly competitive overseas markets. It may also be that Malaysia’s federal government eventually decides it will let Li Shufu buy all or some of DRM-Hicom’s 51.1% holding in Proton.
As for the brand’s first SUV, this was initially an import from China but the X70 entered production at Proton’s Tanjung Malim plant in the Malaysian state of Perak in December 2019, a year after its market launch. While the original is scheduled to be replaced in China during the first half of 2023, the X70 will probably instead continue until 2026. Its mid-cycle facelift – and there should only be one – is expected to take place in mid-2022.
We will know if this company really has changed its ways soon enough, meaning that the days of pushing aged cars are gone. The best selling Saga is coming up for its fourth anniversary of production this September but so far, there has been no facelift. If one happens, that’s a good sign. If not, the wretched cycle of discounting and ever lower sales along with ten or more years of production will lead to the same old problems.
The current generation of this 4.3 m long sedan went on sale in Malaysia in September 2016. As well as being manufactured there, in March 2019, it was announced that this model would be assembled at a plant in Karachi by year-end. Alhaj Automotive, the Proton distributor in Pakistan, will put together the CKD kits at a greenfield site. Even though the project has fallen behind schedule, a new date of “2021” was stated in December. That was on the occasion of a ceremonial X70 being handed over to the Pakastani government as a gift from one Muslim majority nation to another.
Following the arrival of the two Geely SUVs, the brand will gain a much needed small MPV. The Chinese vehicle maker’s Jia Ji would also become a Proton, Geely’s president An Conghui told journalists in March 2019 at the model’s media preview in Zhuhai. No release date was revealed, nor did he state whether this right-and drive model would be imported or instead locally built or assembled. Looking at the latest naming system and the 4.7 m length of the Jia Ji, ‘M60‘ may be what Proton calls this successor for the Exora, a minivan which dates to 2009.
Details of other Proton models can be found in PLDB.
Lotus Cars
When asked would there be an unplanned deferral for the start of Evija build, a spokesman for Lotus Cars told just-auto.com on 2 June, “At the moment there is no delay as we are back manufacturing the Elise, Exige and Evora. Evija series production is still on target for deliveries to customers later this year”.
Production of this electric hypercar should commence in July. Pronounced ‘E-vi-ya’, it was revealed as a prototype at an event in London in mid-July 2019 and then shown in California at Monterey Week during the following month.
The Evija is priced from GBP1.7m (plus tax) and features a carbon fibre monocoque in an attempt to keep weight as low as possible. Lotus says it is aiming for 1,680 kg. A 70 kWh battery pack is positioned behind the two seats and there is a claim of up to 400 km (WLTP) of range. The combined output of the motors is to be 2,000 PS and 1,700 Nm, zero to 100 km/h will take fewer than three seconds and top speed is said to be in excess of 200 mph. Using a 350 kW unit, the Evija’s charge time will be 12 mins to 80% and 18 mins to 100%, the company says.
Reports for many other manufacturers’ future models are grouped in the OEM product strategy summaries section of just-auto.com.
Future platform intelligence
More detail on past, current and forthcoming models can be found in PLDB, the future vehicles database which is part of GlobalData’s Automotive Intelligence Center. Proton and Lotus vehicles which are not discussed above can be found there.
This is the third in a series of reports which look at the passenger vehicle divisions of Geely Holding. The first two looked at Maple, Geometry (Jihe/Ji He) and Geely itself, then Lynk & Co. Next comes Volvo, to be followed by Polestar.
