Proton has taken a remarkable number of public hits in recent months. M(squared) giving them a shafting, 11% disappearing off their market value, VW dumping them -- its been a horrendous run of affairs. What the public hasn't seen yet is the internal affects these events have had on the organization. After a chat with some people in the know, it seems that Proton is bleeding badly from within: staff morale is low, "hardcore" Proton employees are devastated at the stock slump, "ship jumping" is becoming increasingly common. Its a tough place to be right now, and things may get worse before they get better -- the only guarantee that Proton has right now is that being a GLC, the Government won't let them fall too much further.
I was on the road this morning, and i was suddenly flanked by two very sporty looking cars -- not sure what make or brand they were, but the curves on them we very pleasing. No doubt, they probably also perform as well as they look, and i dreamed for a split second what it would be like to drive on of those cars. The moment i had that thought, my mind flicked to Proton and it occured to me what they were trying to do with MV Augusta and Lotus and even VW was the right strategy: it made me understand even less why they weren't following through on those projects more aggressively.
Proton started with the strategy of cars for the masses -- cheap little square boxes all Malaysians could afford. When they tried to export these quaint moving rectangles, obviously the sophisticated, spoilt-for-choice European, or Australian/NZ consumer would have nothing to do with it. Then Proton bought MV Augusta and Lotus, hoping to raise their profile and gain access to upper-end vehicular technology. But the problem is that, even after so much money spent acquiring both companies, so little can be shown for it.
Wouldn't it wonderful if we could see on-the-road today, Proton cars of remarkable quality, style and sophistication? Cars that would elicit the same response i had when i saw those sport cars this morning. Cars that would provoke the desires of the consumer. These cars would probably be priced out of reach of the average Malaysian, but that wouldn't be the point of the whole exercise anyways -- the point of it all would be to build mind-share and brand equity for Proton. For all the things that Proton has, that is the thing that is most lacking.
Ferrari makes very few cars each year -- i believe every car is finished by hand, thus making them very slow (and costly) to produce. Couldn't Proton take the same route -- with the amount of money Proton has lost in bad deals, it could be argued that cost shouldn't be an issue. Hire the best and brightest in the industry, pay them whatever they desire, and design and build a line of must-have uber elite cars. RM384 million (which was the price Proton paid for MV Augusta) would be enough to do something like that. And unlike MV Augusta, perhaps Proton would have something to show for it after all that money spent.
If current organizational structure doesn't allow for that sort of expense or strategy, do what Toyota did, and branch out into Lexus. Proton is a third world company in a third world country -- that is ultimately true, and in the minds of the sophisticated consumer, that makes their cars decidedly third world as well. It doesn't have to be that way -- branding is all important and can make a significant difference in influecing the spending decisions of the consumer. There is still time to turn things around, but if Proton doesn't act soon, then it will bleed itself to death.
