Why Proton Needs Rebranding as Europestar for China?

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Jul 13 2007
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Proton Holdings Bhd (KLSE: PROTON, stock-code 5304) today inked an agreement with China’s Jinhua Youngman Automobile Manufacturing Co Ltd to sell 30,000 units of its GEN.2 for a period of 20 months, rebranded the Europestar, in China. It was reported that Youngman will eventually develop a new range of Made-in-China Europestar cars with the engineering services of Lotus.

Youngman is a commercial vehicle manufacturer (which has focused on luxury coaches and trucks) that has been awarded a licence from the Chinese authorities to produce passenger vehicles.

With car ownership in China currently at only 1% of the population, it’s no-brainer that the market is indeed a very attractive for any car-makers to make profit out of it. The Western, Japanese and Korean cars had already making inroads into China. With the middle-income group growing in size spurred by economic growth expected to be above 8% annually, the car market is estimated to be revved up by 20% to 30% annually in the next few years.

Malaysian should be proud of such achievement after previous repeatitive failures penetrating into oversea market (successfully) after more than 20 years in the automobile industry. But should you actually start celebrating? Why are the Chinese not proud of selling the original “Proton” logo but has to resort to rebrand it as “Europestar”? The name Europestar, while is not a sophisticated name whatsoever, it still gives an impression that to sell the car somehow it has to be associated with “Europe” to convince potential customer that qualities are attached with the car.

Somehow, I’ve a feeling that the cars will be sold at a cheaper price or better quality (with safety features such as ABS and Airbags) or both compare to what you’re paying in Malaysia. I do not have the detail info on the pricing and specification as of now, so if you happen to read this article and have the information, kindly share it with the rest of the readers of FinanceTwitter.

If the selling price is cheaper than in Malaysia, does that mean Malaysian were being taken for granted all these years? Why suck the blood out of the original Malaysian, not to mention the lack of standard safety features, while it can be sold at cheaper price elsewhere while still making good profits?

On the other hand, if the selling price is cheaper but Proton is actually making losses, why would then proceed with such a venture? Just to show-off that Malaysian Proton is not dead yet and still can go into the China’s Silkroad as if it’s Marco Polo?

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