Bookings for the Proton X50 are opened but the obvious question on every prospective buyer’s mind is, “How am I supposed to book for a car when I don’t know the price?”
Proton dealers nationwide are ready to accept a RM 500 booking fee for the Proton X50 but you can’t view the car at any showroom yet. Instead, Proton is organizing closed-door preview sessions to selected customers but if you are not on their preferred customers list, you’ll have to wait longer.
With no clear indication on when will prices be announced, outrageous rumours of all kind are bound to circulate on social media, speculating the many reasons why Proton is not announcing the prices yet – none of it is true, we can assure you.
There’s no need to point out the obvious to Proton, because they are the ones that stand to lose the most the longer they delay the announcement/launch.
As explained in my previous column, Proton, like all other car companies, is racing against time to close the gap in their annual sales target plan, a plan that has been thrown out the window no thanks to Covid-19 and the related MCO/RMCO.
Realistically, November is the final month that dealers can close sales as December’s pace will be slower and is typically reserved for fulfilling vehicle deliveries to customers before the year ends.
Which also means that October is their final chance to launch the X50. Any later than that, there is not enough time to chase for the 4,000 plus sales target that Proton has set for the X50 for this year.
In short, as far as Proton is concerned, the car should’ve been launched yesterday. So what’s holding up Proton then?
To be clear, Proton is not the only company facing a delay in prices. The all-new 2020 Honda City and Nissan Almera too are facing a similar situation. Like Proton, Honda and Nissan dealers are also collecting orders with no price list.
The Proton X50 is locally-assembled at Proton’s Tanjung Malim plant alongside the Proton X70. Proton has announced the X50 project will buy almost RM 1.8 billion worth of locally produced automotive parts. Being the first right-hand drive version of the Geely Binyue (the donor car for the Proton X50), a lot of development work was also done in Malaysia.
All these mean that the Proton X50 is eligible for some very significant excise duty rebates under Malaysia’s Industrial Linkage Programme (ILP) and Energy Efficient Vehicles (EEV). The former offers tax rebates based on the value of local contribution while the latter rewards low fuel consumption vehicles (based on their weight category).
The Proton X50, with its 1.5-litre turbocharged engine, will be slapped with around 75 percent on in excise tax, before ILP and EEV rebates.
Proton vehicles, with their high level of local content and local development work, typically allows them to get almost full excise tax exemption, which is why there’s very little difference between the Proton X70’s Langkawi and Semenanjung Malaysia price (differences in transportation charges included).
However, this rebate is not automatic, not even for Proton. It needs to be approved by the Ministry of Finance.
Every model and variant requires a separate application, each having to go through a series of very time consuming approvals/audits, starting with submissions to the Malaysia Automotive, Robotics & IoT Institute (MARii), before it is passed to the Automotive Business Development Committee (ABDC), and after that the Ministry of International Trade and Industry (MITI), with the Ministry of Finance making the final decision.
Estimates on how long the application process takes vary, depending on who you ask but it averages around six months! Yes, half a year.
Also remember that businesses and government agencies weren't operating at full capacity in the first half of this year due to the MCO.
Unfortunately, government agencies are not the most efficient and in the current economic and RMCO climate, not forgetting the state of political instability that our ministers have to deal with, approval of car prices don’t rank very highly in their order priorities.
So if you want your Proton X50 to be cheap, you have to wait until Proton gets the prices approved.
With no approved price lists, the next best thing that Proton can do is to build up their order bank first, and to hold road shows and closed-door customer preview sessions to keep prospective customers engaged, and hope that they don’t change their mind midway when the waiting period gets too long.
The root cause of the problem lies with our unnecessarily complicated tax structure and opaque criteria for incentives, but that’s another topic for another day.
Price list aside, Proton's marketing staff also face an unnecessarily complicated challenge in locking down a suitable launch date and venue, a challenge that no other car company (apart from Perodua) here has to deal with.
As a (quasi) national car marker, it is customary for Proton events to be officiated by a minister. Apart from securing a date with the minister, speeches have to be drafted with their political secretaries, and Proton has to accommodate the government’s productivity-sapping protocols.
They also have to deal with stakeholders from Geely and DRB-Hicom, each with their own set of challenges, sometimes conflicting ones. It’s a very difficult task.