Proton ‘unsure’ of TPPA’s impact

SUBANG JAYA: Proton Holdings Bhd, the automotive arm of DRB-Hicom Bhd, is unsure of the impact of the Trans Pacific Partnership Agreement (TPPA) as it is yet to complete an in-depth study of the pact.
“As far as TPPA is concerned, we’re still talking to the government and we need to go into the details of the application of the TPPA.
“We do have our reservations. But again we need to sit down and clarify the issues because our objective is to protect the business and the employees of Proton,” CEO Datuk Abdul Harith Abdullah told a press conference here yesterday after unveiling its new engine programme.
“We’ve not completed that series of in-depth discussions with the (ministry’s) TPPA team, I will not be able to say exactly (the impact),” he said.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed had said Proton and Perodua will be at a disadvantage under TPPA, which will open doors to global markets.
Asked about Proton’s financial performance, Abdul Harith said he believes the company is still on track to return to profitability on the back of its transformation plan and launches of new models, with three within a year.
“It’s still very much on track towards the end of FY16 and FY17,” he said.
Proton posted a wider net loss of RM646.3 million for the financial year ended March 31, 2015 compared with RM462.03 million a year before. This was on the back of a 167-fold jump in revenue from RM34.83 million to RM5.83 billion.
Proton remains a big drag on DRB-Hicom’s financials, which slipped to a net loss of RM15.82 million for the six months ended Sept 30, 2015 against a net profit of RM200.93 million for the same period in the previous year.
Meanwhile, in collaboration with Ricardo, a global engineering, strategic and environmental consultancy in the UK, Proton will launch six variants of its new engine in 40 months – with the first to be rolled out within 30 months, that is, by the end of 2017.
Abdul Harith said the new engine will meet the most stringent requirements, namely low emission level of Euro 6c and low carbon dioxide figures post 2020.
“We expect these engines to perform very well and we’ll meet Euro standards, which means we can produce cars that can be sold in the UK.
“We’ve not been selling cars in the UK for some time because the current engine does not perform to the standard imposed by the UK and Europe, but this new engine will be able to perform and we can in the future tweak the engine and improve the performance,” said Proton chairman Tun Mahathir Mohamad.
The capital expenditure for the new engine programme is RM600 million.
However, Abdul Harith said the company is unable to determine the pricing of cars with the new engine at the moment.
The new engine will see 25% lower in fuel consumption and up to 20% higher performance.
Proton held the first firing of its latest powertrain 1.5 TGDI (turbo gasoline direct injection) at Ricardo Plc’s facilities in the UK yesterday.
With the new engine, Proton is now prepared to further expand its overseas presence, said Abdul Harith.
Currently the overseas market contributes between 5% and 7% to Proton’s sales.