Malaysia’s national carmaker Proton Bhd has entered the small car market for the first time with a new 1.2-litre, five-door subcompact hatchback named the Savvy.
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Proton normally produces sedans and other vehicles with engines ranging in size between 1.3 and 2.0 litres, noted Kyodo News, adding that it is also the first new car launched by Proton this year.
The small car sector has long been dominated by fellow national carmaker Perusahaan Otomobil Nasional Kedua Bhd, or Perodua, which launched its latest compact car called the Myvi in May.
Proton reportedly has high hopes for the Savvy, priced from 40,500 ringgit (about $US10,660), to lift its revenue in the face of stiff competition from many cheap foreign cars that are flooding the market. Malaysia is Southeast Asia’s biggest passenger car market.
”With this new model, Proton is confident that its competitiveness as a car manufacturer will be significantly enhanced,” Proton chairman Azlan Hashim told Kyodo News.
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By GlobalDataProton, created by then Prime Minister Mahathir Mohamad in 1983 to spearhead the country’s industry, has long dominated the domestic car market largely due to government protection through various tax incentives. However, that protection has been slowly dismantled as the government is forced to open up its market under the ASEAN Free Trade Agreement. Proton’s market share dwindled to around 40% last year, pushing it to seek new markets overseas, including Indonesia.
Mahathir, who was appointed a Proton adviser in April last year, told Kyodo News at the launching of Savvy that Proton’s Indonesia car assembly plant will begin operation at the end of this month.
The plant in Jakarta, a joint venture between Proton and Malaysian auto-parts maker Tracoma Holdings Bhd, is expected to produce the Gen 2 and Wira models.
Azlan reportedly said some 8,000 units will be produced in the first year although the plant has a capacity of 50,000 units a year. He added that cars assembled at the Indonesian plant will help Proton qualify for tax breaks under AFTA.
Proton exported 17,243 units in 2004, up from 7,338 units in 2003, and it aims to double sales again in 2005 to 34,000 units.
As for the Savvy, it is currently aimed at the local market but there are plans to export it. Proton said it can produce up to 2,000 units of the new model a month.
”Proton is still young. We are competing with giants all over the world. We produce 200,000 cars or so (a year), but the giants produce millions of cars,” Mahathir told Kyodo News. ”It will take us a little bit of time.”
He noted that South Korea exports 70% of its production, while Japan exports 60%.
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