The AutoIndustrie Blog: Proton Perdana replacement…NOT

20 Apr 2015 | Author: | Comments Off on The AutoIndustrie Blog: Proton Perdana replacement…NOT
Proton Perdana

Proton Perdana

replacement. NOT

Rumours of a new Perdana replacement have been making its round on many Malaysian forums after images of a Proton-badged mid-size sedan began to surface on the Internet. I wish to put a couple of things straight. Unless there was an abrupt turn between the middle and end of 2007 which I was not aware of, this project was a still-born and has since been shelved by Proton.

If you ignore the badging, the car in question is actually an Australian built Mitsubishi 380, a mid-size sedan largely designed for the Australian and Middle-East market, one of the two largest markets outside the United States for medium sized sedan. However, the vehicle was launched at a time of rapidly escalating prices which has dampened much of the Australians appetite for medium sized sedans.

As the global car market is shifting towards more fuel efficient small cars, the 380 is competing in a reducing segment. Mitsubishi#8217;s woes were further compounded by the fact that it had to compete with the segment domineering Toyota Aurion (Asian Camry) and the favourite among old-school nationalistic Australians #8211; the Holden VE Commodore and Ford Falcon.

Even sales of the Aurion has been encouraging (though Toyota#8217;s success has been at the expense of Ford and Holden), Toyota too has to admit that the Aurion is competing reducing market segment. Hampered by poor sales and an under-utilized factory, Mitsubishi Motors Australia was desperately seeking for an export program. Malaysia#8217;s Proton seemed like a possible partner.

With background out of the way, the vehicle in the picture was actually shipped in to Malaysia from Mitsubishi#8217;s Tonsley Park plant in early 2006 for homologation and local climate assessment by Proton, as the two companies seek to review their depressive financial positions. Though product wise the car could be considered as a replacement for the long-serving Perdana, both Mitsubishi and Proton had different requirements as a company.

Mitsubishi was looking for an export deal, which does not make much sense to Proton as its Tanjung Malim and Shah Alam plants were grossly under-utilized as well. Plus, as Australia is not part of AFTA group and as such import duties will be very prohibitive. And with the unfavourable currency exchange rates, the deal did not went any further.

But the final nail was placed on the coffin when during a closed-door viewing by the Prime Minister of Malaysia Abdullah Ahmad Badawi, the 380 got a thumbs down as the PM is not too keen on Proton continuing to re-engineer other foreign models. He wants to see Proton working harder to develop home-grown cars.

By March 2007, it was pretty obvious that no export deal could be possible to Malaysia as Mitsubishi Motor Australia were forced to shutdown its Tonsley Park operations after years of flagging sales and massive financial losses.

Proton Perdana

An Australia news network’s report on Tonsley Park plant closure.

Take note of the socio-political implications and the political pressures that car industry executives face.

Personally, I see Mitsubishi as a company endowed with many brilliant engineers, as shown in the prowess of its rally-bred technology. However the direction and business sense of the company#8217;s leaders always come across to me as a bit lacking. Mitsubishi#8217;s involvement in motorsports, especially in world rallying has been instrumental in raising its brand profile and awareness.

However, it seems as though everything just stopped there. It seems that there isn#8217;t any clear direction on capitalizing on its motorsport success nor is it how does the company#8217;s motorsport activities filters down to its everyday cars.

Take BMW AG for example, there is a very clear direction for BMW#8217;s motorsport involvements and the role of its #8220;halo-models#8221; like its M3 and M5 on its lesser 3-series and 5-series siblings. Same thing goes to Mercedes-Benz and Audi#8217;s AMG and RS badged #8220;halo models#8221;. Both BMW and Mercedes-Benz uses F1 as its global branding tool, while Audi and Mercedes-Benz uses the DTM for its road cars in Europe.

Audi uses Le Mans to prove a point of its diesel technology used in all its diesel models from the humble A3 right up to its flagship A8. So Mitsubishi uses WRC to prove its fancy electro-mechanical 4WD, which is used only by#8230;err#8230;the Lancer Evolution?

Closer to home, Mitsubishi Motors Malaysia has been trying its luck to penetrate into the Malaysian D-segment sedan market with its superbly styled (exterior at least#8230;) Lancer 2.0GT, undercutting the dominant Civic and Corolla Altis by large sum. However, a poorly thought out sales plan has resulted in Mitsubishi being swamped by orders with a waiting list stretching up to 7 months.

So there is opportunity cost involved with unfulfilled demand leading to lost sales while it could have made more profit and satisfying more customers by not engaging in a price-war with Toyota and Honda in the first place. So right from the start, Mitsubishi has already been perceived as a third-rate cheaper Japanese brand (second-rate being Nissan).

Price-wars works on services products (telco services for example) as the goods are non-tangible and value-added services can be tie-ed in and altered accordingly. However for manufactured products where there are production cost involved, standardised manufacturing processes to adhere to and having a relatively short product life cycle, engaging in a price-war will ultimately hurt your bottom line. At the moment, the Lancer is perceived a cheap alternative to the dominant Civic and Altis.

So its sales will continue to be encouraging, so long as they continue to maintain its current price perpetually. Come its newer replacement model, Mitsubishi is likely to face a hard time convincing its customers that an increase in price is justified.

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