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that it is powered by a 1.2 litre Renault engine. Somehow, Malaysians have had a series of
bad experiences with French cars. In the case of Proton, 2 earlier cars, the Proton Tiara and
the Proton Waja 1.8 were also fitted with French engines. The Tiara had a 1.1 litre Citroen
engine while the Waja 1.8 had a 1.8 litre Renault engine. Both these cars were very well
known for the huge number of problems the cars had, including the prohibitively high cost of
maintenance and spare parts. As a result, these negative perceptions were just too strong for
Proton to work against. To date only about 37,000 vehicles have been sold since its launch in
June 2005. Another setback was that the car was launched only weeks after the successful
launch of the Perodua Myvi. Proton had not considered the Myvi as a direct competitor as it
was one segment larger than the Savvy. Unfortunately, the Malaysian public did not have the
same impression and a direct comparison was frequently made by customers and salesmen
alike. Hence, the Proton Savvy was often at the losing end. Customers made their buying
decisions based on what they knew best, and that was the interior space of the vehicle. The
fact that Proton was using a foreign engine which was markedly more expensive due to the
sudden increase in the exchange rate of the Euro to the Malaysian Ringgit only compounded
the issue even further.
The Turnaround
Proton began to embark on a Business Turnaround in 2006. After the new management took
over, various changes were immediately effected. There were a list of 11 main initiatives
ranging from “Enhancing the Product Portfolio”, “Improving Quality”, “Improving Sales and
Distribution” and “Enhancing Human Capital” just to name a few. In the initiative “Enhancing
Product Portfolio”, several sub-initiatives were developed such as establishing a „New Product
Introduction‟ or NPI process. This process had several gateways that had to be met diligently.
By complying to this process, the management at Proton could ensure that the products
developed met the necessary quality standards and equally important, Proton could sustain
the manufacture of the components since the vendors in turn had to comply with the NPI.
Additionally, Proton was to follow a new product development process and an element called
Voice of the Customer or VOC was introduced. A new division called the Marketing Division
was introduced and this division took on the daunting role of facing customers and identifying
exactly what it was that they liked about Proton cars and also more importantly, what they did
not like about the car. The list of dislikes was obviously very high. All these findings were then
compiled and the information was then fed back to the Research & Development Division in
order for the development of the new car to begin. Due to the product development efforts
and the positive response to customers‟ needs and complaints, new models such as Persona,
Proton Saga with the 1.3 litre Campro engine which was developed in house and Exora which
enhanced customer‟s trust in the product and in the brand.
Quality Assurance
Another common practise among OEMs is to have Resident Engineers at the Vendor‟s site
during the initial stages of production, just to ensure that the vendor complies with the basic
quality requirements. A resident engineer is usually an experienced engineer from the OEM,
typically from the Quality, Procurement or Production divisions, and is stationed at the vendor
premises for a pre-defined period of time. The resident engineer will advise the vendor about
the specific requirements of the OEM which the vendor may not already be familiar with. The
Resident Engineer will normally ensure that the vendor production has stabilized before
returning back to base.
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