Proton gets ready for India; may use Nissan’s V platform

Proton, the Malaysian carmaker, hopes to announce its India plans in three to four months, according to group managing director Dato’ Haji Syed Zainal Abidin Syed Mohamed Tahir. “Since 2008, we have conducted a series of customer surveys and road tests in order to thoroughly understand market requirements and customer behaviour. We believe that our range of products is capable of satisfying the needs of the Indian market,” he told Brian de Souza of Autocar Professional.
It is learnt that Nissan may license its global compact V (for Versatile) platform to Proton which desperately wants a credible small car to gain a foothold in key markets like India. Built for emerging markets, the V platform is the basis of the Micra manufactured in India and Thailand. Alliance partner Renault also has access to this platform as a base to spin off its own range of compact cars expected in 2012. Excerpts from an interview:

Can you give us an update on Proton’s plans for the Indian market? Are plans close to finalisation and what can we expect?

Proton has been in talks with several Indian companies over the past few years, assessing various potential approaches and business concepts. Currently, we are deliberating a proposal and once a consensus is reached between the parties involved, we could expect to introduce the first model in India soon.

Which segment does Proton find the most attractive, given that your company has several models in the compact car space and India is a major small car market?

Since 2008 we have conducted a series of customer surveys and road tests in order to thoroughly understand market requirements and customer behaviour. We believe that our range of products is capable of satisfying the needs of the Indian market. To date, our current models fit well in the Indian automotive segments of A3 (Saga, Persona, Gen.2) and MPV (Exora). Our future new models in the pipeline have also taken into consideration the need to fulfil the Indian market requirements - GSC (segment A2) and Persona-R (segment A4).

Localisation is key to bringing a product within an affordable price range. How do you plan to go about establishing a local vendor base? Would you look at leveraging the production capacity of an existing Indian player?

We believe that an utmost priority must be given to fulfilling, and in some cases, exceeding customer expectations. It is important that product packages offered to customers be positioned at a price range that is acceptable to the market. In summary, product value and selling price must be proportionately positioned. Localisation or local sourcing is an essential process for any company (including Proton) to expand its local operations in a host country. It is also crucial for Proton to eventually offer a product price that is competitive to the customers. We believe that local vendors based in the major automotive hubs in India such as Chennai, Mumbai/Pune and Delhi NCR are more than capable of fulfilling the requirements for a new entrant like Proton, given their notable technical capability, production capacity as well as industry experience.

Proton has been eyeing the market for quite a while but today there are many players such as Nissan and Volkswagen in the small car space which weren’t there a year ago...

The challenge for Proton is always there and we will continue to improve our brand to penetrate the Indian market. Our core focus is to ensure that our product strategy and product development programme will be timely implemented. Additionally, the other key areas such as business model, local sourcing, brand building and customer management must be concurrently implemented in order to deliver products that meet customers’ expectations as well as to instil customers’ confidence in the Proton brand.

Will Proton consider bringing in cars in completely built unit (CBU) for some models that are not likely to bring in the big numbers?

We have studied the CBU proposition and realised that this is not preferred due to various reasons related to financial feasibility and program justification. However, based on the recent revision of the definition of CKD/ SKD and import duty structure, we are now revisiting all the product entry permutations.

Brian de Souza is assistant editor, Autocar Professional