I do YouTube community polls from time to
time where you get to choose the subject of an upcoming video, and in a recent poll the
Aston Martin Lagonda won with 30% of the vote, but a video on Proton Cars got 29% so it would
be a crying shame if I didn’t also do that one, especially as you seemed to like the video
on Daewoo. Yes, it’s pronounced Day-yoo and now die-yoo, I know – I saw the comments!
I remember Proton making a splash in the UK in the late 80s with the cheap and cheerful
Saga, but then it seemed to disappear. Well, there’s a lot more to Proton than just that! They
bought Lotus, and surprisingly were still selling cars in the UK in 2016, although no one probably
realised it and certainly no one was buying the cars. Why did Proton try exporting around the
world for decades while selling almost no cars, and what are they doing now? This isn’t
the Proton Story, this is the Proton Saga. [music] Like many emerging economies in the second half
of the 20th century, Malaysia saw economic growth by becoming an industrialised nation, and
that meant having its own car industry. In 1979 the National Car project was launched by
the Malaysian government, and that led to the formation of Proton in 1983, Proton standing for
Perusahaan Otomobile Nasional or the National Automobile Company. But like other developing
nations, they knew building their own car from scratch would likely result in lots of wasted
money and a half-decent vehicle. Much better to partner with another car company and learn
from them. They agreed a deal with Mitsubishi to produce a version of the Lancer Fiore
that would appear in 1985 as the Proton Saga. Mitsubishi would own 30% of the company, with
the Malaysian Government holding the remaining 70%. As part of the deal Mitsubishi would exit
the Malaysian market to prevent competition. Malaysia’s first car, even if it was essentially
Japanese, was a point of great pride for the country. Two were driven 2,500 miles (4,109km)
across the country to show their durability. Getting a Proton at launch was a challenge with
just 700 cars available for sale at launch, but production quickly increased, thanks to
the Malaysian Government slapping import duty on imported cars and a national fervour
for Malaysia’s first car. Just one year after launch the Proton Saga held 64% of
the under 1,600cc domestic car market. Once local sales were satisfied,
Proton could venture into exports, initially focused on right hand drive markets
because Malaysian drivers drove on the left. The first market was Bangladesh in 1986, followed
by Brunei, Malta, New Zealand and Sri Lanka. Fresh off importing the ultra-cheap Yugo, Malcolm
Bricklin looked to import the Saga into the US, but ran into emissions regulations. Proton lost
a significant amount of money in the venture. It also angered Mitsubishi Motors who were trying
to crack the US market themselves and felt Proton would undercut their efforts with something almost
the same. They fired Proton’s existing board and clamped down on future export ambitions.
In 1987 the Saga got a larger 1.5L engine, an automatic gearbox, a small facelift, plus
a hatchback as the Saga Aeroback. A year later Proton had sold an impressive 100,000 cars.
Despite holding back on certain exports, Proton entered the European market starting in Ireland
then quickly the UK where it got a warm reception from the press, winning three awards at the 1988
British Motor Show, and from the public as well with Proton exceeding their initial sales targets.
Proton’s UK office claimed it was the “fastest selling make of new car to enter the UK”, and by
1994 it was outselling Hyundai and SEAT. A small victory, but from small acorns grow big trees.
It was even selected by the Humberside police. Proton adverts promised “Japanese Technology,
Malaysian Style”. And a significant milestone for Malaysian Proton occurred in 1989 when the
Saga went on sale in neighbouring Singapore. An update appeared in 1992, the Saga Iswara. In
1993 Proton launched their second car – the larger Wira, sold as the Persona in some markets.
It would again be produced with Mitsubishi, being based on the Lancer, and available as
both a 4 door saloon and 5 door hatchback. It was followed by a flurry of new models. The Satria
small hatchback, also known as the “Compact” or 300 series launched in 1994. It was based on
the Mitsubishi Mirage as was the 1996 Putra 2-door coupé. The Perdana was even larger than the
Wira, in the same class size as the Toyota Camry, and based on the Mitsubishi Eterna. But Proton
wasn’t wholly wedded to Mitsubishi. The Tiara in 1996 was a Citroën AX built under license, and
signalled Proton was starting to look beyond its Japanese partner. And while sales were good in
Malaysia thanks to tariffs discouraging exports, Malaysian rival Perodua started up
in 1993, producing Daihatsu clones. In the 1970s Mitsubishi had pinned their hopes of
success by partnering with Chrysler. Chrysler had floundered which limited Mitsubishi’s ability to
succeed. By pinning their success to Mitsubishi, Proton found themselves in exactly the
same problem. Mitsubishi made good cars, but their failure to sell in significant volume
on the world stage limited the money they could pour into new cars. Proton might have a full
range of cars and Malaysia’s roads might be filled with them, but exports were another
story. The initial flurry of excitement in the UK had dissipated. Proton sold almost
200,000 cars worldwide in 1997, but only around 16,000 made their way to Europe and sales
only decreased in the following years. But as you can see, sales at home were buoyant
with the Malaysian economy growing rapidly and cheap financing options to get new
drivers into a Proton. For example, at launch there had been a 6 month waitlist
for the relatively luxurious Perdana. There was talk of removing the tariff training
wheels with the World Trade Organisation putting pressure on Malaysia to level the playing
field. A new CEO of the still Government controlled Proton was cutting costs to make
Protons more competitive, and a mammoth new factory was under construction which would
raise production to 500,000 cars a year. Proton felt they had money to invest and splurged
on British car company Lotus. It was hard to see the synergy between a specialist sports car
company and a wannabe mass car maker mostly using parts from other companies, but there was surely
method to this madness. The first fruits of this partnership was the 1998 Satria GTi that was Lotus
tuned, producing a not-that-impressive 0-60 time of 8.5 seconds, but it was a car with much better
handling and performance than a regular Proton. Protons CEO had struck the Citroën deal to
move away from a reliance on Mitsubishi, but after his tragic death in a helicopter
crash in 1997 Proton returned to their old ways of relying on Mitsubishi, especially after
the 1997 Asian Financial Crisis dashed any hopes of Proton expansion, at least in the short term.
1998 sales were less than half the previous year and Proton scrambled to weather the storm. They
cut shifts, and mothballed work on that new larger factory. Thankfully the money earmarked for this
project could be diverted to keeping Proton alive, and it was still the best-selling car maker in
Malaysia. By 2001 sales in their home market had recovered, but exports remained anaemic.
It had been 15 years since the Saga launched, and Proton needed to look for success beyond
Mitsubishi, who seemed to be lurching from one problem to another. They were limited in
which markets to export to as Mitsubishi didn’t want competition from its own cars,
so Proton started designing their own cars, or components at least, beginning with
their own engine, dubbed the “CamPro”. It was meant to be installed in their next car,
the Waja - but wasn’t ready in time. “Waja” meant “strong as steel” in Malay, which if you
think about it is an odd name for a car that’s actually made of steel. I mean, of course
it’s as strong as steel, it's made of steel. It’s not made out of blancmange! Despite lacking their new engine, using ones from
Mitsubishi and Renault, Proton claimed it was the first Proton designed car. It certainly had a
lot of Proton designed parts, however it was later shown to be based on the Mitsubishi Charisma
/ Volvo S40 platform. It was also almost the same size as the Perdana which was still on sale which
must have caused some confusion in the showroom. And like previous cars it failed to
make an impact on the export market. The Juara microvan appeared in 2001, a joint
development between Mitsubishi and Proton which didn’t sell well. The Waja was used to create the
Arena or Jumbuck pickup in 2002. That also failed to sell well in Malaysia but did better abroad.
But that wasn’t saying much – for example only 1,800 were sold in the UK, and total Australian
Proton sales in 2003 only amounted to 1,320 cars. The original Proton had been updated in 1992 and
it got another update in 2003. The Mitsubishi platform was 20 years old at this point, so
the 1985 roots were clear despite sprucing up the exterior. It got a new modern interior, but
lacked common features that were table stakes on other cars such as airbags. And although the
car was nearly 20 years old, quality problems with this and other Proton cars remained,
unforgivable at this point. Some Malaysians stumped up almost double the price for a foreign
import just to get a car they could rely on. To make matters worse, World Trade Organisation
rules meant these tariffs would soon be ending. The mothballed second factory opened in 2003,
giving Proton a yearly output of 350,000 cars, but sales were still woefully below this,
and exports in 2003 amounted to just 8,000 cars. In the last quarter of 2003 Proton posted a
loss. They were a mass car maker without mass car volumes, something MG Rover could tell them wasn’t
a recipe for success! Protectionism meant they still weren’t a lean company, and quality issues
meant customers weren’t interested in any case. The purchase of Lotus wasn’t exactly
helping the bank balance either. Proton and Mitsubishi ended their long agreement
in 2004, and the same year Proton launched the first car to use their own chassis and engine –
the GEN•2. It was produced in partnership with Lotus, but it too would be beset by production
delays stemming from the new CamPro engine, and with design problems as well – the roof was
too low for adults to sit comfortably in the back. Sales were a disappointment.
Rather than sort out Proton’s production problems, management went on another
buying spree, purchasing Italian high-end motorcycle manufacturer MV Agusta for €80M (£69M,
$88M USD, $132M AUD). This turned out to be a disastrous move, and they ended up selling
it again just a year later for a nominal €1. The Citroën AX clone, the Tiara
had ended production in 2000, but Proton released a successor in 2005 - the
Savvy. Like the GEN•2 it was designed in-house, although it would use a Renault engine. Reputedly
MG Rover were keen to rebadge and import it, but they went bankrupt before that could happen.
The Satria was updated to use a Proton chassis and CamPro engine in 2006, but neither car did
much to improve Proton’s sales, which were the lowest since the Asian Financial Crisis. And
this wasn’t a slump in the Malaysian economy, people were just choosing other cars. Five years
before, Proton held 60% of the Malaysian car market. It now had just 23% now import tariffs had
disappeared. Spending money on its own chassis – a necessity now it had cut ties with Mitsubishi
- were costing too much for the volumes they were selling, resulting in inevitable losses.
Proton made plans to forge an alliance with Turkey and Iran to create a so-called “Islamic” car –
something to appeal to the millions of Muslims around the world. It would include a compass
to show the direction to Mecca, a box to store the Koran and a headscarf compartment.
That project came to nothing, but Proton would continue producing new cars to replace its
Mitsubishi-derived models, all using Proton’s chassis and engines. The Persona update arrived
in 2007 along with an update of the Saga in 2008. These models were thankfully more popular and
helped steady the balance sheet somewhat. Proton also struck a deal with Chinese company
Youngman to produce the Persona and GEN•2 in China. Proton’s cars were still on sale in the UK
despite terrible sales, although they tried to drum up interest by sponsored Norwich City.
Maybe they stayed in the UK because of Proton’s British connection with Lotus Cars, maybe because
they felt their next car would surely the export breakthrough they needed. But the Persona, so
popular in Malaysia, only sold 4 cars in Britain in 2008 meaning export operations, at least
in the UK, remained a drain on Proton’s funds. Proton were producing saloons and hatchbacks,
but the world demanded different cars. Minivans large and small, SUVs and crossovers.
Proton launched the Exora MPV in 2009, using an all-new Proton platform. It was updated
in 2010 as the Exora MC, “MC” standing for “Minor Change”. That’s maybe not the best marketing move
ever, but at least they were honest! The Exora marked a renewed collaboration with Mitsubishi
who would start selling the Exora in Japan, and in return Proton could sell the 9th generation
Mitsubishi Lancer as the Proton Inspira. Proton even made quality and suspension improvements
to the car that received praise from Mitsubishi. While the Inspira remained on sale, just two
years later Proton released a car to replace it - the Prevé. Although it might seem odd to
launch a very similar car just two years later, it’s likely the Prevé was already in development
before the Mitsubishi deal that produced the Inspira, and Proton would likely make more
money from the Prevé that used the Proton GEN•2 chassis and CamPro engine. With a shape
created by ItalDesign, it had the sort of luxury features found on competitor’s cars, such
as climate control, Bluetooth connectivity, cruise control and an optional in-car Internet
connection. It was also the first Proton to get a 5-star rating from the Australasian ANCAP
safety agency. A hatchback version, the Suprima S launched a year later. Like previous models,
both cars failed to capture many export sales. Proton had tried their hand at motorsports
in the past, winning minor rally series in the 1980s and 1990s. They also won the
2002 Production World Rally Championships, but these were with cars that were essentially
Mitsubishis. The new Proton engineered Satria took the drivers and constructors title in the 2011
Asia Pacific Rally Championship, underlining that Protons engineers had created a good platform. If
only they could persuade customers to buy them. Proton had been Government controlled since its
inception, but in 2012 Proton was purchased by Malaysian conglomerate DRB-HICOM. They
in turn purchased a smaller engine from Malaysian oil and gas giant Petronas, the E01
with the hope of fitting it into future cars. And despite the 350,000 capacity factories
in Malaysia producing only 116,000 cars, in 2014 Proton announced an agreement
to build a new factory in Bangledesh. With the Savvy needing replacement, Proton
worked with ItalDesign and Lotus to produce a concept of what it might look like – the
EMAS concept in 2010. There was a thought of a regular version being badged as a Proton, with
a hot hatch version being sold as a Lotus. It would surface as the Proton Iriz in 2014 but
a Lotus version never appeared. The Petronas E01 small engine wasn’t ready, so the car got
1.3L and 1.6L versions of the CamPro engine. The luxurious but aging Perdana favoured
by Malaysian Government officials was replaced with a second generation in
2014 which was a rebadged Honda Accord assembled in Protons factory in Malaysia.
Sales continued to drop, but Proton released three new models in 2016. The first was an updated
Persona, essentially an extended, booted Iriz. Next was a third generation Saga, still one
of, if not the most popular car in Proton’s range. Finally, Proton launched the Ertiga, a
rebranded version of the Suzuki Ertiga 7-seat MPV. Protons were still on sale in countries like
the UK despite almost no sales for decades. Proton had intended to make a new push into the
British market in 2013 with four new models, but it was postponed due to more stringent
EU emissions and safety regulations. Proton was losing money and making poor business
decisions. Something had to give. The Malaysian Government offered Proton a £352M ($326M, €296M,
$484M AUD) lifeline but mandated that Proton must have a tie up with a foreign car company in
the near future. Proton vetted several suitors, and in 2017 it was announced Chinese car maker
Geely, owner of Volvo had acquired a 49.9% stake. They also purchased a controlling stake of Lotus.
That Petronas E01 engine would be mothballed, and elements of it would be used to make
the existing CamPro engine more efficient. Still a gaping hole in Proton’s line-up
was a lack of crossovers and SUVs. With access to Geely platforms this was quickly
rectified with the X70 introduced just a year after Proton was acquired. It was a rebadged
Geely Boyue and initially produced in China. Some changes had to be made – Malaysia
can be a tough place for cars with 34° (94°F) heat in standstill city traffic, plus Malaysia drives on the left, and Geely’s
car had never been designed with this in mind. The X70 was followed by the X50 in 2020 and the
X90 in 2023, both rebadged Geely models. These have produced a resurgence in Malaysian sales -
Proton can finally supply the cars that customers are looking for. And Proton is still aiming for
the export market, selling the cars in Brunei, Indonesia, Kenya, Mauritius and South Africa. In
2019 Proton announced they would build a factory in Pakistan and expand sales there. There’s
talk of Proton electric vehicles in 2025, presumably rebadged versions of Geely cars.
So, was it right for the Malaysian Government to invest in a “National Car” in the 1980s?
On the face of it Proton seems a failure. It can’t have made much of a profit, and had to be
protected through much of its life by tariffs on foreign cars. But there is more to Proton than
profits and losses. There’s the sense of national pride that buoyed a nation, and encouraged
them that they’re on the up and up. There was the skills the thousands of workers acquired
that they used in other industries, helping to turn Malaysia into an industrial nation, the
original goal of Malaysia’s National Car project. But it's also clear that Proton was left to
limp along for far too long. Like Hyundai they started by manufacturing cars from other
manufacturers, learning all the time, and then they ventured into making their own cars. Malaysia
is too small a market to sustain the large spend on modern car platforms, and where Hyundai
sold vast quantities of cars around the globe, Proton’s cars weren’t a good enough value to make
an impact outside of Malaysia. Proton’s largest export market was the UK, and over 27 years they
sold less than 150,000 cars. It didn’t help Lotus' prospects either, as Proton weren’t able to invest
significant sums to turn the Norfolk company into a sports car powerhouse like Ferrari, and there
was never much synergy between Proton and Lotus. The Proton saga will continue, in Malaysia at
least, where it’s got nostalgia for thousands of drivers who’s first car was a Proton. So, that’s the history of Proton. If you want to see what was happening on the other
side of the fence, there’s the history of Mitsubishi cars on the right. Thanks for
watching and I’ll see you in the next video!
