Fleet News

Far East meltdown hits Proton's rental buyback plans

TURMOIL in the Far East tiger economies has backfired on Proton's ground-breaking bid to build UK daily rental business without residual value tears. The pioneering deal involved placing 3,500 Personas with daily rental companies on short cycle then buying them back at a guaranteed price and shipping them to Malaysia to satisfy rocketing demand for second-hand right-hand-drive cars.

But the stock market meltdown and currency devaluation in Proton's native Malaysia means used car demand has dried up overnight, leaving the UK importer saddled with several thousand vehicles. A series of deals with Avis Rent a Car, United Kenning and EuroDollar saw Proton increase sales by a quarter to almost 11,000 vehicles this year.

Some of the initial tranche of ex-daily rental cars has already been exported, but the majority is still in the UK. The company is exploring new avenues of disposal - including other right-hand-drive markets overseas. A Proton spokesman said: 'It's not a situation that Proton believes will adversely affect residual values and we will be doing everything we can to prevent that from happening.'

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