Automakers rely on a multi-tiered revenue ecosystem to sustain long-term business growth. While the initial sale of a new vehicle represents a significant, one-time payment by the buyer, actual long-term profitability lies in aftersales operations.
Throughout the many years of ownership, an owner will come to the service centre for maintenance and regular replacement of wear-and-tear parts. This is a steady revenue channel for dealers, which is why they make big investments in service centres.
Predictable, regular revenue
Besides the two revenue streams, many automakers also have a third stream and this one is predictable and regular – every month over many years. It’s vehicle financing, with Hire-Purchase (H-P) loans being the most common.
Just as banks make their money from interest on credit card balances, auto financing also derives much revenue from interest on H-P loans. It’s highly lucrative and provides a stable financial buffer against the fluctuations of vehicle sales.
Many companies work with banks to offer H-P loans to their customers but if they have a sufficiently large sales volume, it makes sense for them to provide the financing themselves and make money from doing the business. They not only keep the interest but also have better control over strategies to sync with the market conditions.
Dedicated financing arm
Since its inception, PROTON has collaborated with financial institutions to provide loans to its customers. Now, it has established its own dedicated automotive financing unit – Proton Capital Sdn Bhd.
This new company will provide an integrated financing option designed specifically to support customers purchasing Proton vehicles whether through its branches or authorised dealers.
“The establishment of Proton Capital adds an important capability to PROTON’s business model. Financing plays a major role in the vehicle-purchase journey, and having a dedicated financing company allows us to work more closely with our dealers and respond more effectively to customers’ needs,” said Zhang Qiang, Chairman, Proton Capital.
Rather than operating in direct competition with existing commercial banks and financial institutions, Proton Capital functions as a complementary alternative within the local automotive financing sector. With its own company, Proton aims to further streamline the customer journey from initial loan application processing through to final vehicle delivery.
In its initial phase of operations, Proton Capital’s services are available to eligible individual buyers purchasing new Proton models through 12 designated outlets in the Klang Valley. The application criteria cater to salaried staff, self-employed individuals, and buyers with other verifiable sources of income.
Response within one day
Applications are submitted through participating dealership outlets and go through a standard process like other H-P loan applications. Each applicant undergoes individual financial evaluations considering income levels, existing commitments, credit history, and overall repayment capacity. For standard and complete documentation submissions, Proton Capital expects to provide an initial response within one working day.
At launch, the core offering comprises conventional H-P financing for new vehicle purchases, which includes a standard fixed-rate plan as well as a tailored package configured for the Proton S70 taxi fleet. Proton Capital plans to progressively broaden its offerings over time, with dedicated financing packages planned for e-hailing operators and a Shariah-compliant financing structure scheduled for introduction in early November.
There are no application fees charged for submitting loan requests to Proton Capital. All statutory charges, stamp duty fees, insurance premiums, and registration costs are fully disclosed in standard Product Disclosure Sheets prior to the final signing of financing agreements.
Repayment management (payment of monthly instalments) is integrated via online banking and DuitNow transfers using specific assigned CIMB Bank accounts, alongside direct debit options. PROTON intends to expand the reach of Proton Capital across its broader nationwide dealership network as operations grow in coming years.