Stakes are high for the Proton X70 — Analysts
KOTA KINABALU: The stakes are high for the Proton X70 given its role in transforming the brand’s perception and position, analysts say.
The Proton X70, which was first unveiled publicly last month, is Proton’s first model to come from the collaboration between Proton and China-based Geely.
“We believe the stakes for the Proton X70 are high given that it is being counted on to lead a fundamental shift in Proton’s market positioning and brand perception.
“We reiterate that the SUV would test the various operational reforms and processes that are being introduced to win back consumer confidence, and we believe it would be fair to give Proton some time to perfect this process,” AmInvestment Bank Bhd’s research arm (AmInvestment) said in a recent report following the preview of Proton X70 for analysts.
“Proton is still holding its cards close to its chest and has not revealed the prices or volume targets for the X70.
“However, it made the important distinction that the X70 will not be positioned for the mass market or as an entry-level car.
“Proton did not provide a detailed customer profile for the X70, but described them as ‘successful’.
“Apart from better margins and a strategic positioning away from Perodua, it is also eyeing affluent customers with better access to financing.
“We believe Proton is preempting the market for prices of above RM100,000 on the SUV, which comes equipped with superior features but is countered by a Proton brand which has lost much of its goodwill from the public,” it added.
Aside from that, AmInvestment noted that the company acknowledged this and is aware it cannot rely on a marketing campaign and an imported car to fully correct this negative brand perception.
“We are assured that it is orchestrating a bottom-up reform led by the goal to provide better service (with a significantly higher number of 4S outlets than before.
“As a result, we reiterate that of the two SUVs planned by the national carmakers, Perodua will focus on sales while Proton will focus on brand perception,” it said.
Proton has taken the first steps towards localising the X70 with the signing on of 30 local suppliers.
“We understand that volume will be a key priority for the CKD version, and Proton is aiming for 3,000 to 4,000 in monthly sales here as a base for launching exports.
“Parts for replacements and to maintain the units from the initial CBU batch may need to be sourced from China, which Proton says that it has sufficient supply considering the enormous scale of the Boyue there (with an average of 24,000 units sold monthly last year),” it added.
We believe the stakes for the Proton X70 are high given that it is being counted on to lead a fundamental shift in Proton’s market positioning and brand perception. AmInvestment Bank Bhd’s research arm (AmInvestment)