Group Managing Director's Review
From Humble Beginnings
Initially incorporated in 1983 as a humble car assembler in a country then vastly dependant on agriculture, PROTON is now a full-fledged car manufacturer based in a nation now coined as a "newly industrialised country": this is our story; Not only PROTON's, but Malaysia's as well.
PROTON, now Malaysia's largest auto manufacturer, is the only home-grown and indigenous OEM car manufacturer in Southeast Asia.
Clearly, since PROTON's inception, the journey can be best summed up as one of pride, passion and progress.
Today, PROTON's operations reach across South- East Asia, the Middle East, China, Australia and the United Kingdom. With a workforce exceeding 12,000 to date, the PROTON family works across the whole spectrum of the automotive industry including vehicle design, R&D, manufacturing, marketing, sales & distribution and corporate services.
We are especially proud today because PROTON now boasts a range of well-proven and well-received products that enables the brand to seize market share at home where the gap between PROTON and the competition is closing, as well as abroad. Furthermore, through our subsidiary, high-performance car marque Lotus, the Group has all the assets it needs to build a stronger brand globally.
Our efforts and achievements over the past years have enabled PROTON to weather various challenges. Ranging from the financial meltdown of 2008 to the devastating Tsunami that hit Japan in March 2011 and the recent financial market instability due to debt downgrades in the United States, PROTON has managed to record solid and encouraging growth by providing high quality and appealing vehicles to a growing customer base coupled with competitive pricing.
During the period under review, the launch of the PROTON Inspira was a testament of PROTON's pledge to always offer unmatched quality and performance at a competitive price. This was shortly followed by the introduction of significant refreshers such as the Saga FL and FLX, the latter using a Continuously Variable Transmission (CVT) paired to the proven CamPro engine - a first in PROTON's history. These models are well-accepted by the market and have contributed significantly to PROTON's earnings and growth.
Dato' Sri Mohd. Nadzmi bin Mohd. Salleh with PROTON's Advisor Tun Dr. Mahathir Mohamad, Dato' Sri Mustapa bin Mohamed, Minister for International Trade and Industry and Group Managing Director Dato' Sri Haji Syed Zainal Abidin B. Syed Mohamed Tahir at the launch of Proton Inspira.
Committed to the journey of technological innovation and progress, PROTON has entered the Electric chapter head-on. With a PROTON Digital Range Extender Electric (D-REE) vehicle slated to be unveiled within the next three years, PROTON is striving to become one of the linchpins in environmental protection and green transportation, propelling Malaysia forward as a hub of green technology.
Most importantly, at the heart of PROTON's green projects is the will to develop an affordable electric car which will lessen the burden of volatile energy price to the consumer as well as the nation.
Left: Dato' Sri Haji Syed Zainal Abidin B. Syed Mohamed Tahir launching PROTON's Zero Defect Program.
Right: Dato' Sri Haji Syed Zainal Abidin B. Syed Mohamed Tahir and PROTON's Advisor Tun Dr. Mahathir Mohamad taking a closer look at a vehicle during the launch of the logistics hub in Sijangkang.
PROTON's foremost pledge is to deliver quality cars at an affordable price. In order for us to continuously fulfill this vow, PROTON is invested in a two tiered approach: in-house improvement and working with its vendor base.
In-house, PROTON has launched a Zero Defect Campaign, Innovative Creative Circle (ICC) and KAIZEN programmes to enhance upstream supply operations. These initiatives have improved supply quality performance by 50%. Furthermore, with the Zero Defect Campaign, the Complete Build-Up (CBU) outgoing quality level for both Shah Alam and Tanjung Malim plants improved by 30%.
Creation of a reliable and competitive supplier base is key to sustained competitiveness; as is the need to ensure that core vendor efficiencies, competencies and standards meet global market requirements.
Hence, in anticipation of meeting these critical objectives, PROTON has taken proactive steps to initiate a dedicated Vendor Development Programme known as the "Improvement, Control and Education Initiative".
It is hoped that through this initiative, PROTON can help its vendors to continuously improve supply network, product quality, cost competitiveness, delivery performance, engineering capability, financial stability, management competencies and innovation.
Passion
Having achieved our initial goals, PROTON has reached the critical point where it must strengthen its global presence as we are now able to manufacture cars that have a global appeal.
We believe that the value of the PROTON brand is a result of many factors including products and services, customers' experiences and marketing strategies.
PROTON's increased global brand equity and presence is garnering tremendous appeal through Motorsports with the Satria Neo S2000 achievements such as taking pole positions in the third round of the FIA-Asia Pacific Rally Championship (APRC) in New Caledonia. Chris Atkinson won the rally while his team mate Alister McRae took third spot in June 2011. It was Atkinson's second victory and he is now at the top of the driver's standing in APRC.
YB Dato' Sri Ahmad Shabery Cheek, Minister of Youth and Sports, officiated the launch of the PROTON Motorsports Rally Team for the 2011 season.
A group picture taken during the Prime Minster's visit to Lotus facilities in the UK.
And of course, through Formula One, the young Lotus-Renault GP team has yielded promising results with its driver Vitaly Petrov scoring his first podium in the opening race in Melbourne in March 2011 and later, his team mate Nick Heidfeld giving the team a second podium finish when he came out third in the Petronas Malaysian Formula One Grand Prix at Sepang in April 2011. This is a significant milestone indeed: every lesson learnt on the track will ultimately translate into technologies PROTON can use on its road cars.
It is through such constant efforts that PROTON has managed to deliver quality cars and receive a flurry of awards throughout the years. Domestically, the Proton Saga won the "Best Passenger Car Model of the Year (Malaysia) 2010" and the Proton Exora "Best Automotive Debut Model of the Year (Malaysia) 2010.
However, 2011 was a dramatic turning point for PROTON as it achieved a phenomenal milestone internationally by having its own Exora win the 2011 Indonesian Otomotif award for "Best Budget MPV in Indonesia" and the Saga FL win the "Best People's Car of 2011" by Asian Auto. Frost & Sullivan Malaysia 2011 Automotive Awards also recognised the Proton Persona as "Best Value-for-Money Car" for 1.6L and above.
The Future
PROTON is committed to the development of its green technology in line with the government's initiative to make Malaysia a regional hub for hybrid, electric and environment-friendly vehicles.
We will be conducting a Fleet Test Vehicle Program for our Range Extender Electric Vehicle (REEV) in collaboration with the Malaysian Government in the second half of 2011.
PROTON's decision to be involved in the hybrid and Electric Vehicle (EV) powertrains is strategic in nature. Indeed, in comparison to global OEMs, PROTON is a relatively smaller company which has not committed as much investments into internal combustion engine (ICE) powertrain technologies, thus allowing us to quickly and efficiently switch to alternative powertrain technologies such as battery storage powertrain (used in hybrids and EVs). We believe that with the new PROTON hybrids, we will be able to compete with global OEMs who have already launched their hybrid cars in the market.
We believe that with the new PROTON hybrids, we will be able to compete with global OEMs who have already launched their hybrid cars in the market.
The EMAS project was the trigger for PROTON's efforts to meet global trends and to deliver a new family of world-class and eco-friendly vehicles, and a message to the public that PROTON will not compromise on space, quality and performance through the electrification process.
True to its origins and original aspirations, PROTON aims to be at the core of Malaysia's green initiatives and establish the nation as a premier green-tech innovation centre.
PROTON's future is also in exports. Indeed, PROTON has been able to implement the Group's long-term Asian Multi-Local OEM (AMLO) strategy and in general, PROTON recorded increasing Complete Knock Down (CKD) sales to China while sustaining CBU exports from Malaysia.
Our total shipment to overseas markets increased 12.3% compared to the same period the previous year. We believe that with increased global brand presence, ever-improving products and better appeal, PROTON's current international growth is only set to continue and improve even further.
Progress and Vision
Looking at the dramatic turnaround PROTON has undergone in the past six years, I take this opportunity to thank all PROTON staff for their unrelenting efforts, passion and hard work without which PROTON would not be where it is today: at the doorstep of a new regional and global chapter.
While many see new daunting challenges and risks ahead in this new venture of ours to become a global Malaysian brand, I remain confident as the PROTON family has displayed exceptional loyalty and dedication to the Company in good and more turbulent times. PROTON will one day stand strong and proud on the global automotive map.
We are already seeing the beginning of a success story that saw an automotive company start from humble beginnings to a competitive and global automotive manufacturer uplifting with it, along the process, a pool of creative engineers and skilled workers.
On this note, I am pleased to present to you our Operations Review that highlights the key developments and initiatives of the Group, which is a clear reflection of our achievements to date.
Thank you.
Dato' Sri Haji Syed Zainal Abidin B Syed Mohamad Tahir
Group Managing Director
PROTON Holdings Berhad