The Proton brand is in trouble, can it survive?

Back in July 2013 I wrote a post about how Proton must fast track its branding activities. You can read the full article here. Two years before that in 2011 I wrote about that the first rule of auto advertising was ‘to keep it real’. You can read that post here. More on this in my next post.

The first post quotes then Proton Edar CEO Hisham Othman as saying that the company, “Would pay greater attention to product quality and customer service.”

Fast forward to March 2016 and Proton Chief Executive Officer Datuk Abdul Harith Abdullah is promising, “new product introduction, network rationalisation, the introduction of new dealers and upgrading of services at our centres.”

This comes soon after the announcement in February 2016 that the company was recalling close to 100,000 Exora, Preve and Suprima models with defective oil cooler hoses. The recall was announced only after the news broke that the national car maker was surreptitiously changing hoses without the knowledge of the owner.

Proton is in big trouble. Its market share has dropped from close to 80% to 17% in little more than 20 years. Proton service centres rarely deliver on promises made and many consider the cars to be inferior to the competition and over priced.

In other words, the brand and its reputation is in tatters. Abdul Harith has acknowledged the problem and has vowed to “reform and rebrand.”

What we don’t know at this stage is what Abdul Harith and his team consider to be a rebrand. Certainly some of the noises coming out of the firm are good.

For instance he stated at the weekend, “We have an audit team going out there to make sure that key performance indicators are met.” That’s a good start. The service centres and their ability to look after customers are key to this rescue mission. On this matter he said, “To address the poor quality of our customer services at after-sales operations, key improvement initiatives will include network rationalisation, the introduction of new dealers and upgrading of service at our centres.” Owning up to the faulty hose deception is another good start. As is getting rid of crap dealers, as long as they aren’t replaced with more crap dealers.

Meanwhile, Hong Leong Investment Bank wrote in a report that, “negative consumer perception on Proton’s quality has been a major blow to the national carmaker for many years.” The report adds, “various programs have also been introduced to improve (the) customer experience and provide more value-add services, such as courtesy car service, pick-up and delivery service, quick service money-back guarantee, mobile assist service and one-stop customer care line.” I know what you are thinking – this isn’t the first time Proton has gone through this process.

So can Proton survive? Provided the new Proton cars really are exceptional and meet target market requirements for value. If they are still poor and the team tasked with implementing the rebrand don’t know what constitutes the level of service consumers are looking for and they are able to train the service centre owners and staff to deliver meet those requirements for value at every touch point and every time, it has a fighting chance.

In other words, a rebrand is not the CEO standing up and repeating what his predecessor said 3 years ago. It’s not a change of logo or an advertising campaign. It’s a ‘fit for purpose’ product that is able to deliver on promises made. It’s a comprehensive overhaul of all the processess and systems involved in delivering the value the customer needs.

It’s the collection of data and having the knowledge to interpret and use that data. It’s the ability to deal with issues and crises in an open and transparent manner. It’s the ability to work with potential customers, assuage their fears with solutions that matter to them, and often only them. It’s about going the extra mile, time and time again and often in different ways.

It’s about communications that resonate. Not about a ‘big idea’ created by an advertising agency or the CEO. It’s about talking to customers in a language that they understand and will address their concerns.

It’s an ongoing relationship with the customer that turns them into fans and advocates. If all these are in place then Proton could achieve it’s target of 150,000 vehicle sales this year and start to reverse the decline in its market share.

This is the first in a series of articles where we will track Proton and see how it is doing.

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