KUALA LUMPUR: As Proton vendors upgrade to 4S centres, they must focus on new technologies and manufacturing parts for electrical and green cars, prominent economist Dr Yeah Kim Leng said today.
This will be in line with Proton’s foreign strategic partner, Geely’s quest to position itself to be the number one electric car manufacturer in China.
“If they (Geely) are able to transfer some of the technology, it would augur well for Malaysia more so if they make Malaysia the production hub to penetrate ASEAN,” he said.
The Proton-Geely tie-up was also strategic given that the car industry was currently very highly competitive, he said in an interview.
Besides deep financial capabilities, the renowned China car manufacturer also has important technological capabilities,” he said in a statement containing excerpts of the interview.
Dr Yeah said only the global players could survive in what is surely an increasingly competitive market.
In contrast, “niche and small players, as well as national car players, would find it increasingly very difficult because they do not have the economies of scale.”
More importantly, they do not have the research and development capacity and the deep financial pockets to continuously invest in research and development and, improve car designs, he said.
“Of course moving towards new technologies, electric vehicles in the future and hybrids from internal combustion engines is very important,” Dr Yeah said.
As far as vendors and car makers are concerned, unless they adapt and improve upon the technologies, especially in line with the changing trends towards green vehicles, “the future can be considered pessimistic,” he said, adding that the way forward was to switch now to electrical and energy-efficient cars.
Such trends towards electrical vehicles were clearly evident in Europe and it was a matter of time before the trend catches up in China, said Dr Yeah pointing out to the fact that China was already going towards manufacturing electric cars in a big way.
For Malaysia and Proton, Dr Yeah said: “The quicker we follow this trend, the greater will be the potential for the country to emerge as a regional manufacturing hub for global companies.
One of the critical success factors is that they (vendors) must have a very strong distribution network not just in terms of selling, but also in terms of servicing and ensuring all their warranties are fulfilled so that their so-called customer satisfaction is number one in the car industry”.
For the resale value to be maintained, such as support services and a strong network are crucial.
“Proton is doing right by strengthening that kind of distribution network, elevating it to become the so-called showroom of choice for potential car buyers.
“Important pre-requisites are reliability, lower production costs and competitive prices to attract car buyers.
“We understand that the cost of production, especially for a Chinese car model, is actually one-third lower in terms of production cost besides having advanced features,” he added.
Proton would have a very good future if it can absorb some of these production techniques and technological advantages to lower their costs and offer very cost effective incentives.
With all these winning attributes, “we would likely see Proton regaining some of its past glory sooner than later including rising demand from the middle class and using Malaysia as a base to penetrate the ASEAN market,” Dr Yeah added.