The impact of Proton Saga Plus on the existence of Perodua

Kuala Lumpur: Entry level segment has always been the most heated topic in Malaysia and with the introduction of the all new cheaper Proton Saga Plus. The battle is revived again. While foreign manufacturers have shown a rapid increase in sales numbers in the last five years in the C-segment and B-segment cars, entry level market has been for long restricted to two indigenous manufacturers – Perodua and Proton. These two Malaysian automakers has captured the maximum market share and are mostly loved because of their economic and affordable vehicles.

This penetration in the entry level market may very well be the reason for the tremendous success of these two brands in the local market. Proton and Perodua have become the people's brand establishing a monopoly, which no foreigner can beat. Both these counterparts specialise in hatchbacks/sedans ranging from RM 30000 – 40000. These figures are so convincing as it is more accessible than the cheapest CKD drives introduced by giant multinational competitors like Toyota, Honda and Hyundai with the difference in cases being 2 or 3 fold. (Honda Jazz is priced at RM 71K, Toyota Vios at RM 74K and Hyundai i10 at RM 51K)

Until now, Perodua Myvi and Perodua Axia hold the largest market share being the most favourable and cheapest cars available, holding the home-grown trust factor in their arsenal. Although, Proton's bold step of launching Saga Plus with additional features at similar price range will surely spoil the party enjoyed by Perodua. First of all, Proton Saga Plus is a sedan being offered at a meagre price of RM 36K, whereas Myvi and Axia carries a price tag of RM 41K and RM 25K. Secondly, Proton Saga has the trust of selling 1.6 million units throughout the nation, maintaining the position of one of the top-selling models in Malaysia.

Another advantage for Proton is that it has signed an MOU with India's leading manufacturer of entry level vehicles Maruti Suzuki. The company plans to sell Alto 800, Celerio, Alto K10 and most probably the Wagon R. The cars are expected to be sold under the Proton name but will most likely also have the Suzuki branding on them just like with Maruti Suzuki in India. This escalation in model range will prove to be another competition for Perodua.