2009 Annual Report - ChartNexus

Managing Director’s Review
64
For material and parts sourcing, we have started to develop benchmarking and best
practices guidelines in order to stay comparatively at par in terms of our procurements
with other players within the industry.
In addition, PROTON is committed to utilising a systematic decision-making process
termed Value Analysis/Value Engineering or VAVE to secure raw materials and
components at the greatest value, as opposed to cost, which will ultimately provide
a long-term cost advantage to the Group.
Domestic Market
Operational cost efficiencies can also be derived from a strengthened distribution network.
A new Master Dealership Agreement signed between our distribution arm PROTON Edar
Sdn Bhd and Edaran Otomobil Nasional Berhad (EON) to rationalise the sales and services
network of PROTON vehicles certainly emphasises this fact.
The rationalisation aims to effectively reduce the number of sales outlets from 282 to 191
and service outlets from 361 to 214 by end of 2009. The exercise will not only result in costsavings
but improvements in the efficiency and productivity of our dealer network ecosystem.
PROTON will have a unified and strengthened marketing, distribution and after-sales
network, thus allowing us to compete more effectively and efficiently in the competitive
marketplace of today. Ultimately we seek to improve on our customer satisfaction index
(CSI) and service satisfaction index (SSI) not only in terms of ensuring better quality services
but also greater efficiency in logistics arrangements.
Export
Apart from the local market, we have begun a more aggressive approach to capture export
markets as defined under the Asian Multi-Local OEM (AMLO) strategy, namely, ASEAN,
China, India and the Middle East-North Africa (MENA). We continue to concentrate on
these high-growth regional markets for economies of scale and plan to make further inroads
into these markets by leveraging on pre-existing trade and cultural linkages with
Malaysia.