Proton calls review to shore up ailing brand

Five agencies are said to be competing for the business, including Leo Burnett, Ogilvy & Mather, M&C Saatchi, TBWA\ISC and incumbent McCann Erickson, which only won the account in 2004. The appointed agency will be expected to handle the launch of a new 1.3L and 1.6L two-door hatchback this year, as well as media duties. The pitch comes on the heels of Volkswagen abruptly cancelling desperately-needed cooperation plans with the national car maker at Media's press time. According to Yusri Yusuf, Proton's head of group corporate communications, the company's management is looking for a new direction. "We wanted to open up the account and have something a little different for this model," he said. The Government-owned company ran into trouble in the last two years after Asean member states agreed to cut tariffs on car imports that have 40 per cent Asean content. Malaysia, which only reduced tariffs slightly last year, is under increasing pressure to fully comply with the Asean agreement. Further tariff cuts will spell additional problems for Proton as international marques such as Kia and Honda can now sell their vehicles at more affordable rates in the country. Shares in the company have hit a five-year low and Proton's market share has slumped to just over 30 per cent from the 57 per cent high it achieved in the '90s. Not only is the company in trouble financially, the brand that was formed in 1983 as a symbol of national pride has also been suffering from a fall in consumer confidence as seen from a nationwide survey which asked first-time car owners what they thought of various car brands. Proton came in second last out of 14 brands, with Perodua behind it. "Proton is currently spending far below what it needs to be (on advertising), at around two to three million Malaysian ringgit (about US$540,000 to $800,000)," said an industry insider. "If it wants to get back on track they need to be spending at least five to eight million ringgit." As a result of its financial difficulties, the car maker has had to sell its stake in debt-ridden Italian motorcycle manufacturer MV Agusta for one euro (US$9.41). Proton achieved sales in 2005 of 170,000 units, but the figure is expected to rise this year on the back of launches of new models.