Proton Holdings Bhd¡¯s timing for its foray into the small car segment with the launch of its 1.2 litre Savvy yesterday cannot be any better than at a time when consumers switch to lower-fuel consumption cars in the wake of the high petrol prices.
Analysts and though not explicitly, Proton officials, expect Proton Savvy to give the national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which now dominates the small car segment, a run for its money.
Savvy is the replacement for Proton's earlier unsuccesful model in the late 1990's, the Tiara, which was based on the Citroen AX. The Savvy, which has 70% local content, shares a 1.2 litre engine and gearbox with the Renault Clio.
Proton chief executive officer Tengku Tan Sri Mahaleel Tengku Ariff said Proton Savvy was part of its overall strategy to produce even more fuel-efficient vehicles, no less because of the high petrol prices.
¡°The Savvy is all about fuel consumption. It is really about giving a fair bit of change after you tank up. Even the Campro engine (in the Gen.2) is fuel efficient but it was too big to fit into the Savvy,¡± he told FinancialDaily after a media launch of the Savvy in Shah Alam on Tuesday.
Asked on whether Proton Savvy was the answer to high fuel prices at the pump and the market trend of consumers switching to smaller cars, Mahaleel said the Savvy was "attractive." It is the second Proton car to be made at its Tanjung Malim plant after the Gen.2.
The various variants of the Proton Savvy are retailed on-the-road at between RM40,523 and RM43,714. The design of the car was the product of collaboration among Korea's LG, Lotus, Renault and 130 Proton engineers.
Proton's head of vehicle programme A section, Rosle Yaakub, said fuel consumption will be about 5.3 litres per 100km. "So, if you multiply that, say from here to Ipoh, which is about 200km, then it is about 10 litres which is about RM15. In that sense, yes, it is fuel efficient," he added.
The Proton was launched by Proton adviser Tun Dr Mahathir Mohamad in Petaling Jaya on June 8.
Speaking to reporters earlier at the media launch, Mahaleel said Proton targeted to capture 40% to 50% of the market share of 150,000 units per year-market.
¡°Out of 40 million vehicles manufactured in the world last year, 12 million cars were small cars," he said. ¡°We have neglected this market for a long time. This is first of the small cars that we have designed ourselves.
¡°At the moment, we can serve less than 20% of the total market. If demand rises, we can then up more than 20%,¡± he added.
"The Savvy took 26 months to develop, costing RM100 million to RM120 million. Total investment, inclusive of design, tooling, dyes and jigging amounted to about RM496 million. ¡°We don¡¯t pay royalties for the Renault engine. We buy directly from them as and when we need them,¡± he said.
Proton chairman Datuk Mohd Azlan Hashim said Proton had to date invested RM3 billion in research and development. He said Proton's manufacturing facility in Indonesia was expected to start soon and would produce 50,000 vehicles annually.
Meanwhile, speaking to reporters after the launch yesterday, Mahathir said Proton was still in discussions with Germany's Volkswagen (VW) on their proposed strategic alliance. "We will reach there very soon," he said, adding that Proton was open to VW's taking up a stake in the company.
