DRB tried to stop Proton Power of One?

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DRB tried to stop Proton Power of One?

DRB tried to stop Proton Power of One?

Friday, March 9, 2012
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Why the hostility?

RM5 million Proton Power of One concerned DRB and they tried to stop it, but the horse was already out of the gate.

 

Proton MD called up for explanation

 

National carmaker Proton released their Q3 results recently and it made for eye watering reading as the company bled money to end up RM84 million in the red, the reason was simple, they were not selling enough cars to stay in the black.

 

With that alarming announcement, surely the bean counters at DRB-Hicom, the conglomerate that is putting the better part of RM5 billion to take Proton into private hands, would have had fits and wondered if they had underestimated the troubles waiting for them at the national carmaker.

 

And this time Proton could not even shift some of the blame to their expensive English outfit, Lotus, which has been burning cash at a high rate of sterlings. Proton was burning all that money on their own and not paying themselves back through enough sales.

 

Next week Proton is planning to put together a mega event, a large single-brand showcase called Proton, the Power of One that will take up 35,000 square metres of the sprawling Bukit Jalil National Sports Complex car park.

 

Huge marquees are being erected and according to those working nearby, work began sometime in early February and it continues to take shape.

 

An event like this will not come cheap, the last time a car company held an event of similar scale, it cost them over RM4 million. That event was the Volkswagen Das Auto showcase.

According to those involved in the event management industry, Proton will likely have to dish out similar amounts to Volkswagen and this was confirmed by sources close to DRB who learnt that Power of One will cost about RM5 million.

 

This rather large amount caused DRB some concern and they had made clear to Proton’s top management of their unhappiness with the decision.

 

The Mole learnt that DRB called up Proton Managing Director, Datuk Syed Zainal to explain the situation and tried to stop the event but could not as the execution was at an advanced stage with a lot of the show facilities already in place.

 

We were also shocked to learn that the event did not have the full backing of Proton’s own people, because it was expensive and, more importantly they felt that the justification for such a massive spend was poorly thought out in terms of its marketing and branding objectives.

  

Our source said that Proton has been suffering from lack of clarity in their marketing messages and strategy and the current group director of marketing and branding, John Chacko has failed to make any headway.

 

The former Coca-Cola executive joined Proton with an impressive credentials but so far the market has not seen any significant improvement in their marketing or branding efforts.

 

The mega show in Bukit Jalil is Chacko’s initiative and it is likely that any perceived failures in the event, whether in terms of attendance, publicity, marketing value or sales will be the hot potatoes he will have to deal with.

“John’s tenure is probably a foregone conclusion,” said an industry insider.

 

“He is fighting a steep uphill slope because the event was planned as a build-up to the launch of Proton’s new car next week  but changes in the launch schedule meant that the event has lost half its purpose and finding a replacement purpose is going to be a huge challenge.

 

“I don’t think ‘Committed to be better’ is a strong enough message to justify a multi-million spend on a single event.

 

“In fact I think the message makes it look as if Proton is half-hearted in its pledge, a pledge that such a big event should carry would be one that promises to be the best or the pledge to be number one again in the hearts and minds of Malaysian motorists,” he added.

 

Sore from this surprise, DRB will probably keep a real keen eye on the event and determine if the RM5 million is well spent or simply flushed away.