Proton and its parasites... oops, dealers.

What other industry pays you profits when times are good, and then pays you compensation when times are not so good?

This holy grail of the business world is none other than the Proton dealerships.

WHY should the dealers be compensated even one cent if their dealerships fail? Where in the whole business of entrepreneurship, are profit guarantees handed out? My god, these dealers (who happen to consist entirely of politically connected Malays) had already enjoyed cheap loans and govt aid when setting up their dealerships. After which they have raked in more than 20 years of obscene profits from a captive car market. Now when the gravy train is chugging to a halt, they want to be paid to close shop?!

And Proton has the gall to ask the govt to foot the bill! What's worse is the govt is gutless enough to actually fork the cash over. If not for the political and racial complications, would the govt have done so? Isn't this another glaring example of the NEP's failure... where any affirmative action that is not tied to punitive consequences for underperformance, will amount to a waste of resources?

If you ever wanted to know why nobody respects bumi businesspeople... well, here ya go. Proof in the pudding. It's bastards like these that give other legitimate bumi entrepreneurs a bad rep.

What next? Paying compensation to Proton's suppliers because Proton is not buying their stuff anymore?

I ask again, do we need a national car industry?... Fucking hell, NO WE DON'T!

PROTON has asked the government for another RM16 million to carry out its consolidation exercise. Under this voluntary separation scheme, for which Proton has already been given RM10 million to execute, car dealers were offered RM150,000 in “relief assistance” to close their Proton dealer ships.

...many car dealers had snubbed it because the offer was too low. Some dealers have written formally to Proton asking for more while others have requested for amounts of up to RM500,000.

Sources said Proton had proposed to increase the relief assistance from RM150,000 to RM300,000 per dealer.

As if that's not enough to convince you that the Proton dealers are no more than filthy parasites, here they are asking for quotas to reserve a proportion of car loans for them.

PEDA has proposed that banks should either be given an industry fixed quota for the amount of loans approved for the end-financing of Proton cars and/or different terms of reference be given to loans disbursed to Proton customers.

Proton wants another RM16m to pay off dealers
By Fauziah Ismail (fauziahi@nst.com.my)
May 17 2007

PROTON has asked the government for another RM16 million to carry out its consolidation exercise.

Under this voluntary separation scheme, for which Proton has already been given RM10 million to execute, car dealers were offered RM150,000 in “relief assistance” to close their Proton dealer ships.

But sources said many car dealers had snubbed it because the offer was too low.

They said some dealers had invested a minimum of RM200,000 to set up their operations.

Some dealers have written formally to Proton asking for more while others have requested for amounts of up to RM500,000, through the dealers’ association..

Sources said Proton had proposed to increase the relief assistance from RM150,000 to RM300,000 per dealer.

To ensure fairness, sources said, dealers who had already accepted Proton’s earlier offer would also be entitled to the higher amount.

Last month, Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said the company was on track to downsize its network of dealers nationwide by 20 per cent by the middle of this year.

As of March, Proton had 186 dealers under its sales and marketing arm, Proton Edar Sdn Bhd (PESB), and 97 dealers under Edaran Otomobil Nasional (EON).

In the first phase of the VSS, targeted for completion next month, a total of 102 dealers were offered but only 36 confirmed acceptance.

Proton plans to reduce the number of dealers from 293, as of March, to 247 by the middle of the year and 227 by year-end.

The rationalisation exercise is part of Proton’s initiatives to enhance operational efficiency, cost competitiveness and value to customers.

Consolidation of nearly 400 Proton dealers nationwide is unavoidable as persistent poor sales have caused losses to many of them.

Proton sold and registered 115,546 cars in 2006 with a drop in market share to 31 per cent from 40 per cent in 2005.

Proton Edar Dealers Association president Wan Ahmad Sepwan had been quoted as saying that about 70 per cent of Proton Edar dealers had posted losses from early last year to the present.

“Our members have lost more than RM20 million or an average loss of more than RM240,000 each since then,” he said.

“Peda believes the number of Proton dealers, which is close to 400 nationwide, is too big for one brand.”

Proton Dealers Seek Removal Of Hire Purchase Commission Ceiling

KUALA LUMPUR, May 6 (Bernama) -- The Proton Edar Dealers Association Malaysia (PEDA) has requested Bank Negara Malaysia to remove the ceiling for hire purchase commission.

Its deputy president Armin Baniaz Pahamin said such a move would provide some relief for the dealers who were currently suffering losses due to declining sales.

"PEDA suggests that the rate for this commission be determined by market forces as it can be a vital component in increasing revenue for Proton Edar dealers, thus enabling them to supplement their thin sales margin and survive in the current sluggish environment," he said in a statement here today.

Armin said the hire purchase commission was originally introduced only for Proton dealers to compensate for their low Proton car margin in the 1980's.

He said the commission was then extended to all car dealers, including those of non-Proton cars, until 2001.

"The origins of the hire purchase commission, to support the low car margin of Proton dealers, were forgotten and neglected and the Proton car margin was never revised since," he added.

Armin said the association was looking forward to meeting Bank Negara or any government officials to further discuss any issues that could further enhance the sales of Proton cars.

According to him, the situation is so dire that 90 percent of the Proton Edar dealers are currently unable to break even.

A report last month said that each of Proton Edar dealers were losing between RM15,000 and RM20,000 per month.

To ensure the survival of Proton, PEDA has proposed that banks should either be given an industry fixed quota for the amount of loans approved for the end-financing of Proton cars and/or different terms of reference be given to loans disbursed to Proton customers.

"This will allay banks' fears of poor KPI (key performance indicators) due to Proton customers' profile," Armin said.

"This is a normal practice in other developed countries such as South Korea to ensure the survival of their national car," he said.

Armin added that with the automotive industry being finance-driven, the sales gained by dealers are in direct correlation with banks' approval rate.

-- BERNAMA