Troubled Proton's review hit by agency exits

Black Pencil, Leo Burnett’s sister agency, cited conflict with Burnett’s regional client General Motors as its reason for withdrawing, while Ogilvy could not meet the tight pitch deadlines.

At the briefing, agencies were given three weeks to prepare for a pitch which covers the Middle East, Thailand, India and Indonesia as well as Proton’s domestic market.

According to a source, the “tough brief” involves looking at ways to export the struggling brand globally.
M&C Saatchi, incumbent McCann Erickson, JWT and TBWA-ISCMalaysia remain in contention.

Proton faces a tough future in Malaysia in the face of the rising cost of manufacturing, raw materials and fuel. It is also up against tough competition from foreign imports, particularly Japan.

The company’s problems began in 2006. After eight years of growth, vehicle sales in Malaysia fell from 565,000 to 460,000, with Proton bearing the brunt of the decline.

Higher interest rates and stricter lending laws aided the fall of the auto market, while Proton’s limited and ageing product range led to a slump in market share for the national carmaker. Last year, Proton’s domestic sales volume fell by almost a half, down 47 per cent to 88,635 units, compared with 166,656 the previous year.

During the same period, market share slipped from 39 per cent to 30 per cent as Japanese carmakers Toyota and Honda bulldozed the market, backed by aggressive marketing pushes.

Proton’s sales downturn resulted in net losses of RM590 million on a turnover of RM4.9 billion, compared with net gains of RM46 million on turnover of RM7.8 billion the previous year.

Proton is faring better overseas. Exports have increased by 64 per cent, to 20,528, with the UK, Australia, the Middle East and Africa identified as key growth markets.

The group has also been looking to leverage the brand value of its premium marque Lotus, the car made famous for its underwater appearance in the James Bond film, The Spy Who Loved Me.