The glacial pace of progress is believed to be caused by concerns over the obligation to support the dealers and vendors which are largely bumiputera firms. There are also fears of a big layoff, a move that could provoke a backlash against the dominant political party Umno.In the meantime, Proton's parasites (dealers & vendors) continue to bark at their UMNO accomplices to restore the gravy train, passing the pain to consumers by limiting the number of years a car can be used.
The Singapore Straits Times article below:
Dealers and vendors are in the red as KL is slow to find a foreign partner for Proton
Chow Kum Hor - The Straits Times
A PROTON car dealer, who wants to be known only as Mr Azman, used to make a decent living selling 50 cars a month.
That was several years ago. Today, he struggles to sell even 20, earning an average of just RM1,900 (S$850) a car. He needs to sell 35 to 40 cars a month to break even.
'Sometimes, I have to give discounts to avoid losses,' said Mr Azman.
He is one of the 168 Proton dealers nationwide who have been bearing the brunt of Malaysia's pioneering carmaker's steady decline.
To make matters worse, the government appears to be dragging its feet in finding a foreign partner.
Proton slumped into a RM591.36 million loss in its last financial year which ended on March 31, with sales dropping 40 per cent from the previous financial year. Proton has been hit by rising competition and tighter credit screening.
Dealers and vendors who supply car parts such as radiator hoses, floor mats and windscreen wipers have been equally hard hit.
Some 90 per cent of Proton dealers were in the red for the first quarter of the year, up from just a fifth over the same period last year.
'By now, this number would have gone up,' Proton Dealers' Association (Peda) president Wan Ahmad Sepwan told The Straits Times.
Proton has been on the hunt for a foreign partner for at least two years now.
The negotiations with Volkswagen AG have been on-off for months. Prime Minister Abdullah Badawi last week said the talks have collapsed but Khazanah Nasional, the state investment arm which owns 42.7 per cent of Proton, clarified last Friday that they are still on.
'We are willing to look at ceding control of certain parts of the business...though we need to retain certain things, such as the brand and the distribution,' Khazanah managing director Azman Mokhtar told reporters last week.
Kuala Lumpur is also in talks with US car manufacturer General Motors. Local firms Naza Corp and DRB-HICOM are also said to be keen.
The glacial pace of progress is believed to be caused by concerns over the obligation to support the dealers and vendors which are largely bumiputera firms. There are also fears of a big layoff, a move that could provoke a backlash against the dominant political party Umno.
Mr Wan Ahmad, whose organisation represents Proton dealers nationwide, described the situation as 'very bad'.
'We cannot afford to wait anymore. Our members are forking out huge sums of fixed costs like showroom rental every month,' he said, adding that Peda members chalked up over RM20 million in losses last year.
About 20 dealers have closed shop recently.
Proton Vendors Association president Dr Wan Mohamed Wan Embong said a large number of its 140-plus members supply parts solely to Proton.
He said one way to boost Proton sales was for the government to move quickly to clear the roads of old and unsafe cars. This includes 'kereta potong', a Malay term used to describe cars assembled from cannibalised parts.
'There are an increasing number of such cars. This not only hurts Proton's sales but also poses a danger to road users,' he said.
He also called on the government to adopt Singapore's policy of scrapping vehicles that have been on the roads for 10 years, but this proposal has not been welcomed by motorists.