How Normal Will Things Be?

The Conditional Movement Control Order (CMCO) was announced on 1 May 2020 to relax some restrictions in Malaysia gradually for businesses to resume operations. As the economy restarts, automotive companies also began to resume operations in a controlled manner. The month of May therefore represents nearly a full month of sales in the books, the first since February 2020. As we start to see the reported results, is there any indication of how ‘normal’ things will be going forward?

National carmaker PROTON for example, just declared that it had sold 5,676 vehicles in May 2020, taking an estimated 23.3% share of the market. In comparison, the company sold 10,611 vehicles in the same period in 2019. This works out to be a 46.5% decrease. This is however, not a surprise as consumer goods have seen an overall sales decline in general as markets are affected by the pandemic.

Market is Adjusting to a New Normal

The 5,676 units sold by PROTON in May is a relative improvement (up 73.2%) compared to March 2020 when Malaysia first started to go into lockdown. The increase can be attributed to a resumption of business although in a more physically regulated manner. However, it is estimated that the total industry volume for the first five months of 2020 has reduced by 48.7% due to the pandemic.

Likewise, PROTON’s volume had decreased by 23.3% in the same period. Despite the drop, it is still the second most popular brand in Malaysia with a 21.1% market share, on par with its own targets for the year.

“The MCO and CMCO were an unprecedented event in Malaysia’s history and affected every aspect of the national economy. The automotive industry is now moving towards recovery but as expected, the first month has been a period of adjustment as we adapt to the ‘new normal’ regarding all aspects of our operations,” said Dr Li Chunrong, Chief  Executive Officer, PROTON.

How Will 2020 Trend?

For PROTON, its performance in May was a result of having four popular models in their respective market segments. The X70 SUV remains as the best-selling SUV in the country. The X70 is locally assembled in Tanjung Malim and has been updated recently to include an N95 cabin filter as part of its Proton-Intelligent Air Purifier System (P-IAPS). The new filter is also offered to current Proton X70 owners as a replacement for their dust and pollen filter.

Other PROTON models like the Saga, Persona and Exora continue to sustain revenue for the brand. The Saga is the best selling car in Malaysia for May. While the Persona and Exora also lead their respective B-segment sedan and C-segment MPV categories.

“PROTON is thankful our sales have not contracted as much as expected and we also need to say thank you to our vendors who worked tirelessly to ensure we could regain our footing as quickly as possible. It will take a few more months to get an accurate reading of market conditions but we are quietly confident from this point onwards, we will see steady growth for the rest of the year,” said Dr Li.

Attractive Offers to Spur Sales

The consumption of certain goods have taken a hit the past few months and as economies start afresh, consumer brands will start to offer better value to attract purchases. Starting in June, PROTON will entice car buyers with attractive offers and better value. For example, it is now offering the X70 with 0% financing for the first year, subject to a set of terms and conditions.

Starting next week, on 10 June, PROTON will also introduce a reward programme for Malaysian frontliners – specifically nurses, doctors, members of the police and army, as well as Ministry of Health (MoH) and Ministry of Home Affairs (MoHA) staff. The Credit Shield Protection Programme is meant to offer eligible buyers of any Proton model free personal insurance coverage of up to RM50,000 for five years to cover death, accidental death and permanent disability.

“The sacrifices of Malaysia’s COVID-19 frontliners can never be adequately compensated but we hope our gesture will help demonstrate our gratitude for the work they did. As for the financing package for the Proton X70, it will help to make Malaysia’s only premium SUV more affordable for more Malaysians and is now an even better ownership proposition thanks to the introduction of the N95 cabin filter,” added Dr Li.