DRB-Hicom set to ride on Proton’s growth
19 Oct 2023
Hong Leong Investment Bank (HLIB) Research said Proton’s sales target of 310,000 units in 2030 as well as 500,000 units in 2035 are expected to seal its top sales position in Malaysia and place itself among the top three in Asean.
“We expect Proton to launch one new model per annum for the next six years, with a total investment of RM6bil, including allocation for product development, production efficiency and capacity expansion,” it said in a report.
HLIB Research added that Proton is embarking on the next generation vehicle CASE technologies (C – Connected services; A – Autonomous vehicles; S – Shared mobility; E – Electrification).
Additionally, Proton’s electric vehicle (EV) implementation is on track, with plans to begin its “smart EV distribution” from the fourth quarter of this year and across the Asean region with a planned new model launch as early as 2025.
“Proton is also collaborating with Gentari for EV development, mobility and ecosystem of new energy. It will leverage Geely’s knowledge and technology to develop its own EV range,” HLIB Research said.
Furthermore, the research house noted that Proton is expected to achieve its fifth consecutive yearly sales growth this year, as the first eight month sales stood at 116,800 units.
HLIB Research said that for 2023, it previously guided a sales target of 150,000 units, indicating a growth of 6.1% year-on-year (y-o-y).
This will be supported by strong demand for existing models as well as the newly launched X90 and upcoming S70 C-segment sedan model by year-end.
“Note that Proton managed to turn around to a profit of RM74mil in financial year 2021 (FY21) and continued to record a stronger profit of RM200mil in FY22,” it said.
“We remain positive on DRB-Hicom’s outlook on strong automotive sales growth potential, leveraging on the attractive model line-up from Proton.
“DRB-Hicom will also benefit from the increasing demand for Honda and Mitsubishi vehicles,” it noted.
The research house said since Proton’s restructuring exercise in 2017, the carmaker has improved the quality of its products to now below 700 points based on the Global Customer Product Audit.
This was a substantial improvement from the 6,388 points in 2018 despite the increase in Proton car sales.
“We expect continuous improvement in product quality and cost efficiency as Proton consolidates its production to Tanjung Malim from Shah Alam by 2026, with investments into better equipped production plants,” it said.
Besides enhancing product quality, the new management has also committed to improving its customer service.
“Management has embarked on the transformation of dealership networks, including increasing 3S-4S centres, refresh outlook and digitalisation, dealership coaching and training, working capital support, dealership business plan, complaint management as well as collaborations with dealerships,” it said.
Source: The Star