Will Proton’s market share fall behind Toyota?

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Once upon a time, as all the fairy tales begin, Proton was top of the tree in Malaysia, with a market share around 80 percent.  All that has changed.

Leader for the past six years has been Perodua, with Proton down in December 2012 to just 17.7 percent, and Toyota now a close third at 17.1 percent share of passenger vehicle sales in the country.

“Perodua (Perusahaan Otomobil Kedua Sdn Bhd) is the runway market leader while Proton over the last few years has been a strong second.  Now Toyota is closing in on Proton’s position,” an unnamed executive told the financial daily, The Edge in Malaysia.

Proton Inspira.Proton Inspira.

Industry executives told the financial daily that Proton’s sales fell by over 11 percent to 140,000 units from 158,000 units a year earlier, missing the company’s target of 200,000 units by a wide margin.

Proton was established by Tun Dr Mahathir Mohamad in 1983 and Dr Mahathir had made it patriotic to buy a Proton, but the company has seen its sales slump in the last decade due to increasing liberalization of the Malaysian market.

Originally, Protons were Mitsubishi rebadged models, which provided a solid foundation for the fledgling automaker but also limited its ability to innovate.

It later succeeded in developing its own vehicle platforms independent of the Japanese carmaker but has since gone back to the practice of rebadging with the Inspira, which is based on the Mitsubishi Lancer.

Following the recent relaxation of vehicle imports and local assembly rules saw buyers abandon the local manufacturer for the increasingly abundant range of foreign makes.

According to The Edge, Proton’s lack of new models bar one for 2013 will also put it under added pressure this year, given the growingly competitive market.  With both Indonesia and Thailand ramping up production, Proton is definitely in danger.