Proton dealers struggle with lower sales, rising holding charges

PETALING JAYA: Many Proton dealers are abandoning the business due to higher vehicle allocation, lower sales and rising holding charges.

According to The Malaysian Reserve (TMR), dealers are struggling to sell enough units to meet break-even point.

This is difficult as they are being allocated about 50 cars a month, twice the average sellable number, a dealer was reported as saying.

This pushes their stock holding cost to RM3 million as unsold units are subjected to 10.35% interest rate per annum after two weeks, he said.

The dealer told TMR that 20 dealers had already decided to seek other business opportunities.

“We are struggling to sell at least 40 units of vehicles to meet the break-even point,” he was quoted as saying.

As of end-November, Proton achieved 66,190 units in sales, a growth of 2% compared to 65,069 in the same period last year.

Earlier this month, Proton vendors were given a month to cut their prices by 20%.

TMR reported that this applied to both current and future models.

China’s Zhejiang Geely Holdings Group Co Ltd owns a 49.9% stake in Proton after inking a RM460.3 million deal with Proton’s parent company, DRB-Hicom Bhd, earlier this year.

Under the agreement, Geely will lend expertise in the areas of production, manufacturing, operations and marketing. -FMT