PROTON Holdings Bhd, the Malaysian car maker that ended alliance talks with Volkswagen AG in November, has rolled out its only new model for 2008 in a bid to return to annual profit.
The state-controlled company plans to sell 50,000 to 60,000 a year of the 1.3-liter sedan, which is a new version of the 1985 Saga, Proton's first car, Chairman Mohammed Azlan Hashim said in a speech in Kuala Lumpur yesterday. That's about half the number of cars Proton sold in the first 11 months of 2007, Bloomberg News reported.
The future of Proton, created in 1983, depends on home-grown cars after the collapse of partnership talks. The company needs more new models to survive competition from Toyota Motor Corp and Hyundai Motor Co in Southeast Asia's largest passenger-car market, according to analysts.
"This model is a very good short-term strategy to help the company back into the black," said Ikmal Hafizi Zulkifli, an analyst at TA Securities Holdings Bhd in Kuala Lumpur, who recommends buying Proton shares. "Long term, the company still needs to beef up its volume. One new model a year doesn't really help so much."
The sedan costs from 29,999 ringgit (US$9,190) to just under 40,000 ringgit. It will compete with the 28,000-ringgit, 0.7-liter Viva made by domestic rival Perusahaan Otomobil Kedua Nasional Sdn, known as Perodua. Malaysian state investment agency Khazanah Nasional Bhd, which owns 43 percent of Proton, ended talks in November for an alliance with Volkswagen.
Proton posted its first profit in six quarters in the three months ended September 30, after losing 589.5 million ringgit in the year ended March 2007. The Shah Alam, Malaysia-based car maker needs a partner to more than double annual production to at least 250,000 and bring in enough revenue to finance one new model a year, consultant Frost & Sullivan said this month.
Proton is targeting export markets because the domestic market isn't big enough, Azlan said. The company last year entered China and Azlan said yesterday the car maker is looking at India and Middle East markets. Southeast Asian nations will be "key" to its export strategy, he said.
Vehicle sales in Malaysia may rise for the first time since 2005 this year as manufacturers introduce new models, according to Frost & Sullivan.