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Is Proton an Ugly Duckling?

Tuesday, February 14, 2006

I just wrote on the issues of the automobile industries being a terrible business (See The Ugly Ducklings! ).

Well, how ironic cos there is a newsclip regarding the
high inventory in Proton.

"reports that there were some 24,000 units of unsold Proton cars worth about RM900 million last year"

Doesn't it makes you wonder when a business carries such a high level of inventory?

And I am really puzzled that how could this high inventory not be a concern?

Err... rm900 million wor..... rm 900 million is not a concern?

Doesn't car models have a limited time frame when it is deemed as desirable? I mean, doesn't buyers of new cars always want to seek to purchase new sleek models? Who would want to buy a new car of an old model? Say if these cares are still left unsold for another 2 years. In 2008, how many buyers who would want to buy a new Proton model which is 3 years old? So for automobiles, the longer these cars are left unsold, won't the value of the inventory diminish.

Anyhow... do you think this is simply bad management of inventory or is it another issue depicting the tough environment in the automobile industry?

Me? I think it is a combination of both. Yes, the automobile is always a tough business but for this issue, I probably think that perhaps Proton's management of its inventory appears to be lacking.

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