Malay dealers facing problems with Proton's new management

Ever since Geely took over Proton in 2017 there has been major shake-ups in the company's operations. Many useless staff have been terminated and vendors have been forced to cut prices or face losing their business to China parts suppliers. Now the turn has come to the dealers. The new management's aim to turn the company around is nothing short of drastic but these are necessary changes for the better of the company's future. The company has been plagued with mismanagement, corruption and poor quality control for decades. The new team from China is pushing through with these changes to improve the image of Proton.

The recent fiasco is about getting dealers to commit to open up 3S centres (Sales, service and Spare parts) or close their dealership. In many ways this is a better direction for the company. Previously there were hundreds of small dealers that only focused on sales and had no service centres. These dealers opened up a small shop and placed 2 cars on display and just sold cars. Now Proton wants to ensure that the customers are able to have access to good after-sales service. Converting a normal dealership to a 3S centre is no easy feat since the investment cost is very high but the 3S centre will provide good long term business for the dealer.

The problem now comes to the small Malay owned dealerships that previously enjoyed privileges from Proton which allowed them to buy cars on credit terms and then pay when it is sold, this is like doing business without using any capital. Proton's management now wants payment upfront for cars sold to dealers and eliminate the business credit concept altogether! Naturally this will be still work out for dealerships with sufficient capital to buy cars but small dealerships will end up closing. Most of the Malay owned dealerships are very small and do not have much working capital so all these dealers have ganged up to lodge an official complain to the Government on the grounds of having a racist policy. This naturally a lame attempt to try to gain back the business advantage but it is clear to see that this new policy is not racist in any way. It is only there to improve the business of the company. It is a coincidence that the new policy affects mostly the Malay owned dealerships.

Since Proton is no longer linked to the Government it is unlikely they will step in and intervene regarding this policy. The protesting group will have to suck it up and accept the fact that it is time they learned how to do business the right way. Having enjoyed the years of benefits from Proton one would think that these business owners would have amassed enough wealth to convert themselves into a 3S centre or expand the business. The key point in this is complacency. It has always been a problem with Malay owned businesses that were given financial support from the Government. This time the support has gone and it is time to wake up!