Proton further drew flak from its suppliers for failing to failure to fulfil promised quantity of parts order.
While it is really possible to recommend buying a Proton these days since Geely came into the picture, the ownership of one may still feature a few provisos. And such is not just because there has been still been admittedly infrequent quality complaints, but simply more so from the fact that stories regarding the short supply of parts are still rather frequent.
Though while owners may be frustrated in waiting several months on parts to fix their cars, it would seem that Proton has managed to attract the ire of those on the other end of the supply chain too. That is as numerous local suppliers for the Malaysian automaker have since voiced their dissatisfaction with it for not entertaining their appeals, when they reached out to the national marque regarding the financial strain from escalating operational expenses they are currently facing.
As reported by the News Strait Times, president of the Malaysia Fujian Chamber of Commerce and Industry, Datuk Low Kok Chuan stated that more than a hundred parts vendors affiliated with Proton Holdings Bhd are facing severe financial strain due to escalating operational expenses. He added that despite the Proton Vendors Association (PVA) reaching out to the national car maker to address the challenges they are encountering, their appeals have been disregarded.
The root cause behind the supplier’s plight has been attributed by Low to Proton’s failure to fulfil the promised quantity of parts orders for its X50, X70, and X90 models, which has resulted in a significant reduction in production output by up to 50%. An anonymous vendor has further echoed these sentiments by disclosing to the paper that despite the automaker’s initial agreement to deliver parts for 1,500 cars monthly, it has since come down to only 200 to 300 cars a month.
This substantial shortfall in orders for parts has resulted in financial losses for the vendors, who have since also been burdened with additional expenses related to production machinery, manpower, and other overheads that came from the recent surge in electricity bills, in addition to the government’s announcement of a minimum wage hike to RM 1,500 from the July 1st last year.
Funnily enough, Proton has actually been seeing successive sales increases in recent years. So it might then beg the question as to how the parts order has dwindled so drastically?
Well, adding fuel to this discontentment from suppliers is to also be Proton’s decision to import competitively priced locally assembled (CKD) parts from China, citing the reluctance of Malaysian vendors to reduce prices as the rationale behind this move. Such actions, according to Low at least, have further strained the relationship between Proton and the vendor association.
Expressing concern over the potential ramifications, Low asserts that this perfect storm of predicaments have not only jeopardised vendors’ production capabilities but also hindered their capital investment, expansion plans, and human resource strategies. He further cautions that if this situation persists, it could lead to the collapse of many vendors, affecting thousands of employees across the automotive industry chain.
It is currently understood that a response will soon be issued by the Malaysian automaker, but it remains to be seen as to what Proton will actually do in light of these public complaints.
