Today marks PROTON cars re-entry into the Chilean automotive market. The last Proton car exported there was a batch of Proton Wira sedans back in 1998. This time, under a new initiative by Andes Motor, a subsidiary of the Kaufmann Group who are a distributor of heavy vehicles, trucks and buses in Chile.
Left - Dato' Abdul Harith Abdullah, Chief Executive Officer of PROTON, Dato’ Syed Muhamad Syed Murtaza, BOD of PROTON, Tun Dr Mahathir Mohamad, Chairman of PROTON, Mr Francisco Mason, Embassy of Chile in Malaysia, Encik Mohd Khalid Yusof, Director of PROTON.
50 units of Proton Prevé left hand drive (“LHD”) will be on its way to San Antonio, Chile, this batch marks the first batch of cars from the total of 1,000 units of cars PROTON anticipates to sell in Chile this year. Aside from the Preve (in both Turbocharged and non-turbo forms) Proton will market and sell the LHD Exora and Saga. The cars will be initially marketed in main cities of Santiago, Concepcion Vina La Serena, Antofagasta and Valdivia Temuco Osorno. Sales are expected to begin in May 2016 beginning with the Preve and Exora followed by the Saga by September 2016.The cars benefit from a 6% tax exempt under a free trade agreement and the Preve CFE should go for USD17,000 per unit there.
Aside from the cars having the steering on the 'wrong' side, or on the left , there are virtually no differences from the one Proton sells locally. The cars comply with the Euro 5 a emissions standard (which Chile follows and surprisingly of a higher standard than here in Malaysia). And here we thought Proton cannot have engines that can cope with Euro 5. Although the issue with Euro 5 is that Europe currently runs the Euro 5b (with Euro 6 coming on line) which has a much lower particulate rating that the current Proton line-up still cannot achieve. So whilst Proton could sell its cars over in Europe, they would be subjected to some tax penalties, and thus be priced competitively.
So before their new engine comes on line, it is these smaller emerging markets that Proton are tapping. Chile is the first of a new wave of Proton exports with a initial sales target of 1,000 units yearly.
On the Proton Saga, this will be the current Saga that is sold today. The soon to be launched new model is still undergoing LHD development as is the Proton Iriz in LHD form. As for why the Suprima wasn't chose for this market, the reason being market demand for Chile is for sedans.
Also mentioned at the press conference is Proton's export plans to Bangladesh. Usually we hear Bangladesh imports in terms of manpower but within Proton, it is another export market. Proton has just sold 10 units of the Preve over there with CKD (local assembly) of the Preve, Saga and Exora within the next few months for tax break purposes (like here in Malaysia). They are also targeting about 1,200 units of Proton yearly.
Chile has a population of 17.3million people with a passenger car market of 330,000. Proton wants a small share to being with. Bangladesh has about 170million people and a growing middle class but, with a small private passenger car market for now. 15,000 cars imported yearly through the port of Chittagong, of which 65-70% are used reconditioned Japanese models. The Proton in Bangladesh wll be priced like a used Japanese import due to the tax incentives of CKD production.
There was a question on the small volume and the countries chosen. Anything that adds to the total production volume of Proton or any auto manufacturer is a good thing. What Proton are doing is tapping what markets they can afford to be competitive in. Chile with its 6% tax relief and Bangladesh with even larger CKD tax exempts are a good start. Imagine 10 new markets, each with a minimum of 1,000 cars yearly. That is still 10,000 units of extra cars Proton has to make and can generate profit from.
Notice the fact that Proton have been in the news almost every week these days. They are not sitting quietly.
PROTON SENDS FIRST BATCH OF CARS TO CHILE
SUBANG JAYA, 1 March 2016: PROTON Holdings Berhad ("PROTON" or "the Company") re-enters the Chile market after its last export of the Proton Wira in 1998. 50 units of Proton Prevé left hand drive (“LHD”) will be on its way to San Antonio, Chile, to mark the first batch of cars from the total of 1,000 units of cars PROTON anticipates to sell in Chile this year.
Proton cars will be sold by Andes Motor, a subsidiary of the Kaufmann Group, a distributor for Chile who signed the Distributor Agreement with PROTON on 1 July 2015.
"Our plan to export to Chile started back when the Malaysia-Chile Free Trade Agreement (“FTA”) was signed on 25 February 2012. PROTON enjoys a 6% exemption of import duty and we are thankful to the Malaysian government for this trade initiative. This gave us the opportunity to identify a viable marketplace for the entry of a left-hand drive market for our cars," said Dato' Abdul Harith Abdullah, Chief Executive Officer of PROTON.
Besides the Prevé, LHD Exora and Saga are the other two models that will also be marketed in main cities of Santiago, Concepcion Vina La Serena, Antofagasta and Valdivia Temuco Osorno.
"We are excited to re-enter the Chilean market after we sold almost 3,000 units of cars back then, from 1994 to 1998. Now, we have a new partner, who is a leading distributor of buses, trucks and luxury cars with a vast network to provide proven sales and after sales services. PROTON will be their first and only passenger car brand to be marketed for the mass market, with Chile's population of 17.6 million and a total industry volume of around 330,000 passenger cars. This huge market potential is a golden opportunity for PROTON in our efforts to increase our production volume and expand our sales and market presence," Dato' Harith added.
"As this year is an interesting year for PROTON, we are positive that this is the beginning of many more opportunities to go global, especially after we complete our current new engine programme for us to meet the more stringent regulations of European countries. We shall continue to build good cars and carry out product improvements so that we not only do better in our home turf, but improve our global presence as well," Dato' Harith added further.
The launch sales for the Prevé and Exora in Chile are targeted to be in May 2016 followed with the Saga in November 2016. The models that will be available for the Chilean market are Prevé 1.6 Standard MT, Prevé 1.6 Executive MT and Prevé 1.6 Premium CVT. Meanwhile for the Exora, it will be the 1.6 Standard CVT and Exora 1.6 Premium CVT. In November 2016, the Saga FLX 1.6 Standard MT and Saga FLX 1.6 Premium MT will make its debut entry.