Proton recalls 95,000 cars
Mahathir Mohamad, left, Proton's chairman, and Harith Abdullah, chief executive, pose with a Proton car on Feb. 16.
CHING YEE CHOO, Nikkei staff writer
KUALA LUMPUR -- Proton, Malaysia's national automaker, is recalling nearly 95,000 cars to repair faulty cooling hoses.
The problem affects three models, the Exora multipurpose vehicle, Preve sedan and the Suprima sedan. Proton, a wholly owned subsidiary of conglomerate DRB-Hicom, estimates that the largest recall in its history will be completed within six months at a cost of over 2 million ringgit ($476,000).
The problem is with a faulty CFE oil cooler hose. One of the materials it is made with can degrade once a vehicle is driven an average of 40,000km.
Infrequent tuneups and the type of lubricants used can also affect the hose.
Once the country's top carmaker, controlling over 50% of the Malaysian market, Proton has been suffering from lower sales and negative consumer sentiment. The company's market share dropped to 17.4% in 2015, when Proton sold 102,175 vehicles in the country.
It is now No. 2, behind Perodua, another national carmaker, with equity participation from Toyota.
"Negative consumer perception of Proton's quality has been a major blow," said Daniel Wong, an automobile analyst with Hong Leong Investment Bank. He added that Proton is trying to reverse the unfavorable brand perception through an "intensified inspection program" aimed at snuffing out problems before vehicles are even assembled.
Proton is also attempting to revive its brand by teaming up with Suzuki Motors to develop new models by the end of 2016. In addition, it hopes to re-enter the U.K. and other European markets by 2017. Its 2016 sales target is between 100,000 to 150,000 units.
Besides Proton, DRB-Hicom assembles Mercedes-Benz, Honda, Suzuki, Isuzu and military vehicles. The diversified group also does businesses in the property, logistics, hospitality, banking as well as waste, transport and airport management industries.
DRB-Hicom's shares on Bursa Malaysia remained unchanged at 1.01 ringgit near the close of the day's trading.
The problem affects three models, the Exora multipurpose vehicle, Preve sedan and the Suprima sedan. Proton, a wholly owned subsidiary of conglomerate DRB-Hicom, estimates that the largest recall in its history will be completed within six months at a cost of over 2 million ringgit ($476,000).
The problem is with a faulty CFE oil cooler hose. One of the materials it is made with can degrade once a vehicle is driven an average of 40,000km.
Infrequent tuneups and the type of lubricants used can also affect the hose.
Once the country's top carmaker, controlling over 50% of the Malaysian market, Proton has been suffering from lower sales and negative consumer sentiment. The company's market share dropped to 17.4% in 2015, when Proton sold 102,175 vehicles in the country.
It is now No. 2, behind Perodua, another national carmaker, with equity participation from Toyota.
"Negative consumer perception of Proton's quality has been a major blow," said Daniel Wong, an automobile analyst with Hong Leong Investment Bank. He added that Proton is trying to reverse the unfavorable brand perception through an "intensified inspection program" aimed at snuffing out problems before vehicles are even assembled.
Proton is also attempting to revive its brand by teaming up with Suzuki Motors to develop new models by the end of 2016. In addition, it hopes to re-enter the U.K. and other European markets by 2017. Its 2016 sales target is between 100,000 to 150,000 units.
Besides Proton, DRB-Hicom assembles Mercedes-Benz, Honda, Suzuki, Isuzu and military vehicles. The diversified group also does businesses in the property, logistics, hospitality, banking as well as waste, transport and airport management industries.
DRB-Hicom's shares on Bursa Malaysia remained unchanged at 1.01 ringgit near the close of the day's trading.
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