Will Proton pivot to a Mercedes-style agency model soon? This is what the company thinks
Sanjay · Dec 12, 2023 09:50 AM
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Though the idea isn't exactly the latest (travel agencies have been operating this way, hence the name agency), the agency model has in recent times grown quite popular with carmakers, with different brands trying it out in select markets, to varying degrees of success.
Brands like Honda have transitioned to it in Australia, while European carmakers like Mercedes-Benz have leaned fully into it in their home market, and closer to us, in Malaysia. Volvo also does the same thing, albeit at a smaller scale with the C40 BEV for now.
A red Proton S70, alongside two Proton X90 at Proton The Apple Auto Bangi
But what about 'bread-and-butter' names, and with this model being adapted by a growing number of manufacturers, would Proton consider this move?
"Not yet, but we are monitoring. If we do that, we have to consider how this would change the dealers [business], what [are] dealers going to do? They've invested millions of Ringgit. Secondly, whether or not the customers or Malaysians at large can accept this concept or not," said Proton's Deputy Chief Executive Officer, Roslan Abdullah.
He continued, "It works elsewhere, but I'm not sure now. If we move into an agency model there will be a lot more things to monitor, and it's not suitable for the time being."
Left to right: Roslan speaking to the media. Next to him is Proton's Director of Aftersales, Wan Hazran Wan Mustafa
To an extent, Proton's cautiousness towards the model could play off very well for them. The agency model, while it gives a lot of control to the manufacturer, is also somewhat tricky to balance as the manufacturer will have to bear increased responsibility for its inventory and administration.
Though there will also be benefits for the dealer – with an increased focus in customer service and support, there's more opportunities to build long-term relationships and sell products and aftersales services – due consideration must be taken in light of their prior investments to update thier showrooms.
For customers, this also means slightly less flexibility (can't haggle for discounts is one), but it also simplifies the buying process.
Still it's a bridge to cross when we get there, and for now, Proton stays with the status quo as it focuses on continually updating its aftersales practices.
With humble beginnings collecting diecast models and spending hours virtually tuning dream cars on the computer, his love of cars has delightfully transformed into a career. Sanjay enjoys how the same passion for cars transcends boundaries and brings people together.
