The National Car project, besides being a catalyst for the industrialisation of Malaysia, was also intended to provide Malaysians with affordable cars. It was timely too because shortly after the first Proton Saga was launched, ‘endaka’ (the rapid increase of the Japanese currency’s value) caused prices of Japanese cars to increase.
Though Proton at that time still imported many parts, there was at least some control over price increases because there was exemption from import duties (for Proton only). Over the years, as other brands have increased the prices of their products, Proton has had to raise its prices too.
It would have been a big challenge for the carmaker to keep the price at RM16,047 (on the road price in 1985 but without an air-conditioner) but it still kept increases moderate. The increasing price gap with other makes was only because Proton was subject to ‘preferential treatment’ when it came to how much tax was imposed on its products.
Production costs rise all the time due to inflation and increases in costs of materials. With a new model too, there is the cost of R&D which has to be amortised and all this has to be factored in when determining how much to charge customers for the model.
Like every carmaker in the world, Proton too struggles with reducing production costs so its cars can be affordable and the challenge is even greater because its total volume is in the hundreds of thousands, not millions like the global players.
Proton doesn’t have the same sort of economies of scale as Toyota or Volkswagen but it still has to keep its cars affordable because of what it is. Even though it is now ‘privatised’ for a second time, the original mission of the company has not been forgotten and today, the company showed how it still has the interests of the Malaysian public at heart by launching an additional version of the Saga which is not only upgraded but also costs less.
The new Saga SV (for Super Value) has a price range starting from RM33,438 and going up to 36,888 (for Peninsular Malaysia). A typical H-P loan will therefore require only RM250 a month in instalments. For those who want more features, there’s still the FLX available but you have to pay more, of course.
Mechanically, the Saga SV has no changes to the 1.3-litre CAMPRO IAFM engine and comes with a choice of 5-speed manual transmission or CVT. 13-inch steel wheels are fitted.
Usually, when a carmaker introduces a low-cost version, it has been due to ‘de-contenting’ but in the case of the Saga SV, the price is lower but the car actually comes with more features, especially in the safety department. Two airbags are now provided, the structure and bumpers are stronger, and the centre occupant sitting in the middle of the rear seat now gets a 3-point seatbelt. Anchorage points have also been provided for childseats.
With the upgrades structure and addition of front passenger airbag, the latest Saga scores 3 stars in the ASEAN NCAP crash test. The earlier version did not score as well and Proton has now addressed the areas needing improvement that were identified in the crash test.
According to a senior Proton R&D engineer, the platform of the Saga was originally designed to be strong and what has been done are enhancements to meet specific standards. He said that in the past, Proton models were engineered to meet standards set by Proton itself but now that there is ASEAN NCAP as the basis which Malaysian consumers will refer to, the minimum standards are clear and the company will now aim to meet or exceed those standards.
On the question of whether Malaysian buyers would get the same level of safety equipment and standards as buyers in other countries such as Australia and the UK, Tan Sri Dato’ Sri Hj. Mohd. Khamil Jamil, Executive Chairman of Proton Holdings Berhad, said that the company’s policy is to meet the minimum standards in the country where the car is sold. Nevertheless, over time, he expects that there will be similar levels of protection for Proton customers in every market.
He acknowledged that, in the past, Proton did enjoy exemptions from meeting certain safety standards but that will no longer be the case. He also promised that Proton will be working on providing more safety features and new technologies at Malaysian prices.
“Our objective is to provide affordable cars to Malaysians and this is demonstrated today by the new Saga SV,” he added. He added that the company is also looking into ways of communising the prices between Peninsular Malaysia and East Malaysia in future. There are logistics costs in shipping the cars across the South China Sea which are difficult to absorb, resulting in cars costing a bit more in Sabah And Sarawak (not just for Proton but also most other makes).
On the controversy over the price reductions which the government is trying to claim credit for, the Proton Executive Chairman did not give a direct answer on whether the reductions claimed were correct. However, he stated that the company will support the government to meet the rakyat’s expectation of lower car prices. It would therefore be safe to say that the lower price of the new Saga SV is due to the efforts of Proton to reduce its own costs, rather than any initiative by the government to reduce excise duties so that cars can be cheaper.