Proton narrows pricing gap

Proton has shaken up its entire range of cars as part of a comprehensive strategic plan to build the brand and market share in the next few years.

Savvy is being run-out for good, Satria is coming down in price and a new sedan is due in October to kick off the range priced below $13,000.

During this month, the Savvy is now priced at $13,990 for the manual or $14,990 for the auto. Both are 'driveaway' prices, inclusive of on-road costs. Driveaway pricing of $16,990 applies to the Persona 1.6-litre manual sedan during August, with the auto variant selling for $18,990 -- also driveaway.

The retail incentive pricing for these two models comes as a prelude to permanent readjustment of pricing for the importer's passenger-car models. A press release issued by the company reveals that it will permanently reduce prices for the Satria Neo, Gen2 and Persona models to complement the lower entry-level pricing -- relative to Savvy -- of a new small sedan to replace the Savvy.

In effect, this revised pricing positions the Proton brand lower, against competitors from South Korea and other countries soon to supply the light- and small-car market segments in Australia -- countries such as India, Thailand and China.

"Early next year, we have plans to move to a pricing structure going forward in view of the ACCC legislation -- so we will move to a driveaway pricing structure..." Proton's local MD, John Startari told the Carsales Network earlier today.

"Part of that is the introduction of 'de-specced' vehicles across the range, meeting a sharper pricing point."

"De-speccing is to meet the competition's lower-specified cars. So in many of the segments they don't have ABS, whereas our cars do. We're basically bringing it to an even specification point, with lower pricing."

"In this competitive environment, we're not able to adjust pricing down with our current cars and many of our competitors in fact are raising prices. We're introducing another car that will offer value for money and people then choose. If they want ABS brakes, they can still have it in that model -- it's just available as an option in a higher-specified car.

"The base models will basically have steel wheels, no ABS brakes -- they'll still have their air conditioning/power steering. They're givens these days. It's the non-essential items that allow us to get a sharper pricing point and people, if they want those features, are still able to buy them and they're not disadvantaged over the pricing today."

Proton is clearing all stock of the Savvy hatch in anticipation of the new light sedan to replace it with effect from October. The new Proton replaces the Malaysian domestic market Saga sedan, but won't wear that name in Australia. Startari wouldn't reveal the name of the new car to the Carsales Network, but does confirm that it has been decided.

With the new car only available as a sedan -- and no Savvy to back it up in the market -- how will it go in a segment traditionally dominated by hatchbacks? Startari admits that hatchbacks appeal more to buyers in this segment, but with the company bringing prices of other models down, those who really want a hatch, can now afford to buy the Satria. The Satria, despite being larger, will soak up some of the previous demand for the Savvy, but the new sedan still provides the company with a price leader below $13,000.

"Under the current scenario, the gap [between Savvy and Satria] is just too great," says Startari.

Originally scheduled for local release next year, the new car's launch has been brought forward -- possibly to take advantage of rumoured delays for the introduction of the Hyundai i10.

"[Hyundai has] been in the press recently, explaining that there's going to be delays with that car -- due to the 'ro-ro' ['roll-on/roll-off' shipping] services out of India and the complexity of dual exchange rates to deal with," Startari explains. "So I can't imagine that car arriving before the beginning of next year -- and we'll certainly be in the market before then."

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