KUALA LUMPUR, Malaysia (AP) — Malaysia's national carmaker Proton launched its first small car on Thursday, hoping to bolster its fortunes after ceding ground to foreign and domestic rivals.
Proton also hopes the Iriz, its first 1.3 liter engine car, will help snatch back market share from domestic compact car maker Perodua and reinvigorate plans to increase overseas sales.
Chief Executive Abdul Harith Abdullah said Proton invested 560 million ringgit ($172 million) to develop the Iriz over four years. He said the Iriz will be a "game changer" for Proton, marking its entry into market for cheaper cars.
"We will continue to forge ahead to restore Proton's glory days as the leader of the industry," he said at the car launch at Proton's plant in northern Perak state.
Once the king of the road in Malaysia, Proton's fortunes dwindled after its home market was opened to greater foreign competition. Exports have remained lackluster, with sales hindered by perceptions of poor quality and bland models.
Proton said it hopes the Iriz will help raise sales this year to 160,000 cars from 138,753 last year.
The Iriz also comes with a bigger 1.6 litre engine. It will sell between 42,438 ringgit ($13,000) and 62,888 ringgit ($19,300). The car is built with a new engine for better fuel efficiency and has good safety ratings.
The 1.3 liter version puts Proton in direct competition with Perodua, whose Myvi model has been the best seller in the affordable car segment for nearly a decade. Perodua, partly owned by Japanese mini-car maker Daihatsu Motor Corp., overtook Proton in 2006 to become the top selling car maker in Malaysia and has maintained its pole position since.
Perodua currently has a 30 percent share of the domestic market, compared with Proton's 21 percent. The launch of the Iriz comes just days after Perodua launched its first energy efficient vehicle.
Auto analysts gave the thumbs-up to the Iriz, saying it is competitive and value for money.
"It is definitely a good start. It broadens Proton's product range and will help improve sales," said Alexander Chia, analyst with RHB Research Institute.
Strong sales for the Iriz will help Proton fund development of new models but it is too early to know if Proton can begin penetrating the competitive global market or continue rolling out good models, Chia said.
"If sales succeed domestically, it doesn't mean all of Proton's problems are over. It will relieve the pressure on the company but we will have to see how far sales can improve, especially for exports," he said.