Friday, 13 June 2008

Syed Zainal Contract as PROTON MD should be renew or terminated...?

The main question we should ask, before getting all emotional in speculating the renewal of Dato Syed Zainal contract as the Managing Director of Proton, is what he did or is doing during his tenure that will expire end of this year?
To answer this question, we have to ask another question, what did he inherite when he accepted the post as the Managing Director of Proton.

I will avoid making statements that is not relevant to me as Proton Edar dealers and as the Deputy President of Proton Edar Dealers Association Malaysia.

I am of the opinion (personal opinion) as a dealer (since 11 years ago) long before Syed Zainal's appointment as the MD of proton, that the MD of Proton's main responsibility (in the eye of the sales dealer & the public since we are the front line interacting daily with the public) is to ensure prompt deliveries of Proton cars to the dealer and hence the customer. Secondly, the quality of cars that is delivered and finally, the profitability of the dealer's network.

Before Syed Zainal's tenure, Proton's ex-stock level was so high that even if Proton factory ceased to operate (without producing new cars), there will be a healthy flow of cars for at least 4 months. NOW, ex-stocks were liquidated and almost ALL Proton variance are on waiting list.

Before Syed Zainal's tenure, there were approximately 400 Proton Edar branches and authorised sales dealers network in Malaysia selling in total approximately 140,000 cars per annum. NOW, it has been rationalize to approximately 300 branches and authorised sales dealers. Of course, i am still angered and still pursuing meeting the Prime Minister, Deputy Prime Minister, Cabinet Minister, the government backbenchers and if need to, even meet the opposition political party for Proton to CLOSE their own branches (from selling Proton cars) and mould and groom their dealers who are pure entrepreneur to perform (hence, even a Ministry of Entrepreneur existed ONLY in Malaysia for the same reason) and in line with the second Industrial Masterplan for entrepreneur development. Why should the tax-payer pay to sustain lose-making Proton own branches for their Corporate Image sake. Proton Edar sales dealers, even without any customer relation training or salesman training, can take better care of the customer as it is their own business. (see my earlier blog-posting).

Before Syed Zainal's tenure, Proton manufacturer's warranty was only for 1 year or 2 years for some models. NOW, Proton manufacturing warranty is extended to a total of 5 years signalling confident of proton management on their own products.

Before Syed Zainal's tenure, customer will have to wait for a warranty claim and the onus to claim warranty falls on the customer. hence, customer has to ensure and prove that their car was properly serviced at proton authorised workshop etc etc.... NOW, Proton even have a "Proton iCare" department to handle and attend to any customer's complains from warranty claim to grouses of proton customer stuck in traffic jam.

Before Syed Zainal's tenure, there were no sales man tagging or registration hence inviting unscrupulous appointment of sales man that led to many syndicated or falsification of customer documents that eventually place proton customer profile at a higher risk than other brand cars. NOW, all sales man must be registered centralise and any irresponsible act of any salesman, will lead to the blacklisting of the respective sales man in the Proton Network.

Before Syed Zainal's appointment, Proton never seek dealers feedback or opinions on the launching of new proton cars when the last end of Proton value chain is actually the dealers. Certainly, Proton dealers who interacts daily with the public have some important comments to relay. NOW, dealers' feedback and comment are taken seriously and dealers are invited to participate in most discussions pertaining to the development and the launching of new model variance.

Before Syed Zainal's appoinment, khazanah, Proton Board of Directors all wanting to sell proton to a foreigner or the much speculated Volkswagen. As a Malaysian as well as a proton dealer, i am very proud to sell Proton cars and not a stupid re-badge Mitsubishi or re-badging of daihatsu into Perodua or Kia into NAZA. Indeed, Proton Waja, Gen 2, Savvy, persona, the new SAGA, soon to be launched MPV are all MALAYSIA PRODUCT. There is no pride in assembling cars and rebadge them to call it a Malaysian car. we are now in the new millenium, re-badging stories in the early 1980s... If we still looking at rebadging cars, then we will not move forward. I never agree with Volkswagen or foreign company taking control of Proton. The truth is, Khazanah or Proton wanted Volkswagen for their under-utilised Tanjung Malim plant. Even if Volkswagen is localised, the price of VW cars will still be above RM100k, and that wont help dealers selling extra cars. Both Proton & Perodua makes up the biggest market share because of car price variance below RM40,000. So why should the dealers be bothered whether the VW deals materialise or not. It is only to make full use of Proton's investment in Tanjung Malim. The economies of scale from VW committed production of 350,000 cars per annum by may provide some economies of scale to the Proton production and make Proton more profitable but what the dealer want is a more value for money car and better quality. It makes more economic sense to mass produce all Proton cars (not the re-badge VW of foreign cars) and target exponential sales for export market (hence, what Syed Zainal is doing now!). Nonethelesss, Proton already have Lotus for technology. Proton factory is one of the most hitech factory available worldwide (but way underutilised) and Proton has the biggest sales network domestically (if properly rationalize, Proton network can be the strongest network!). What we actually need is QUALITY CARS and AFFORDABLE pricing!!! Proton Iswara.. a 20 years old car, was still defective in many aspect, 20 years after it was launched. NOW, PROTON REMAIN A MALAYSIAN COMPANY and proton quality has improved drastically. Even the smallest or the slightest problem as per the Proton Savvy Re-call was for nothing BUT to maintain Proton's quality! The new SAGA and Persona are both affordable and evident from the 40,000 bookings still pending deliveries for each model.

These are factors that is evident and what we see (from dealers' & customer perspective) as effort by Syed Zainal and his team. For those who knew me, they will know that i always argue, debate and never blindly supports (especially previously with TIFLI, Teo Aeng Kyet, Tan Ghee Chow, Dato Donald Choo and Dato Razak Dawood, and now with SIDIK) BUT i strongly believe in Syed Zainal and his team's passion, enthusiasm and humbleness in making sure that Proton stay and remain profitable.

So, my verdict as one of the longest serving dealer (since USPD days) and the Deputy President of Proton Edar Dealers Association Malaysia, is a MUST for Syed Zainal's contract to be RENEW & EXTENDED. Though i have to say that i am still in strong debate with him to close Proton Edar's own-branch!!!! Without the branch, Proton may impose any requirement to increase the dealer's requirement or any upgrading for corporate image but until then, please re-engineer proton own branch (as per my earlier blog), rationalize the dealer's network then dealer may consider further investment on Corporate Image. Now, with shortage of all model variance and an average sales of 30 cars per dealer per month (if lucky, otherwise an average of 20 cars per dealer), any upgrade of the showroom or corporate image will not increase the dealer's car sales. It is evident from previous CI upgrade. Honda dealers invested almost RM1million to Rm3million in their showroom and corporate image. BMW dealer spend more than RM30million in their 3S building (latest being Ingress showroom near Penchala) but they can do so, because with 80 car sales average per month, their return of investment (on the millions of ringgit spend) are attractive and lucrative. With the current overcongestion of Proton dealer's (in the market with an average car sales per dealer of 20-30 cars per month.... and with proton net profit of only a few hundred ringgit per car... hihii

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