Business

South Africa can lose a prominent car brand

Proton’s future in South Africa is under threat because the brand’s import and distribution operations continue to be challenging and costly.

This was the warning from Combined Motor Holdings (CMH) chief executive, Jebb McIntosh. CMH is Proton’s official distributor in South Africa.

Proton is a renowned Malaysian automotive company that specialises in vehicle design, manufacturing, distribution, and sales.

Since 2017, after Geely Holding Group acquired a 49.9% stake, Proton has significantly enhanced its market presence.

Geely, founded in 1986, is a Fortune 500 Chinese automaker known for its range of vehicles, including passenger cars, commercial vehicles, and EVs.

The strategic partnership between Geely and Proton has revitalized Proton’s offerings, integrating Geely technology and platforms.

Geely owns prominent brands like Volvo and Lotus and is renowned for its innovation and global expansion.

In September 2022, Proton relaunched the car brand in South Africa ten years after it exited the market.

The company then offered the Proton X70 and Proton X50 to South Africans, with more models set to follow.

The Proton X70 and Proton X50 were modern vehicles that offered luxury and advanced features to South African drivers at an affordable price.

In 2022, McIntosh said they had high hopes for the Proton brand in South Africa because there was a gap in the market for a quality SUV within an affordable price bracket.

“There are many luxury brands selling SUVs in South Africa, but most are simply unaffordable to the average car buyer here,” he said.

CMH planned to have 25 dealers within six months, the first 17 of which had already undergone sales and technical training.

“A full range of replacement parts was also already in stock in our distribution centre, so our customers can buy the vehicles with confidence,” he added.

Proton deputy CEO Roslan Abdullah said the company was aggressively pursuing export sales, believing that this was one of the pillars to growing its overall volumes.

Proton’s lacklustre performance in South Africa

After its 2022 relaunch, Proton had mediocre results. By July 2023, the brand was selling around 100 units in South Africa through 26 dealerships.

That means that despite its relatively low price tag, the brand sold fewer vehicles than more expensive brands like Volvo and Mitsubishi.

One of the biggest challenges Proton faced was the rapid growth of affordable car brands like Suzuki, Haval (GWM), and Chery.

Despite a challenging year for South Africa’s motoring industry in 2024, Suzuki, GWM, and Chery have stood out.

These brands have managed to grow their sales as South African motorists hunt for value and search for cheaper alternatives.

Apart from price, Chinese brands like Chery and GAC Motors also offer among the longest engine warranties of all cars on the market to instil trust in their vehicles.

In the case of Chery, each one of its models is covered by a 10-year/1-million kilometre engine warranty.

Proton struggled to compete. McIntosh said the Proton import and distribution operation has continued to be challenging and costly.

He said that while Proton was well received in South Africa, there was a low warranty experience and problematic pricing.

McIntosh said they will sell the remaining Proton inventory, which is not significant, by the end of August 2025.

After all the remaining cars have been sold, Combined Motor Holdings and Proton will decide on the way forward.

McIntosh’s tone in his CEO Report and the financial results presentation shows that South Africa may well lose the Proton brand for good.

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