No place for sentiment in Proton deal

AMID all the excitement over Proton Holdings Bhd's sale of a 49.9% stake to a Chinese company last week came some sarcastic remarks from former prime minister Tun Dr Mahathir Mohamad.

Mahathir, who is considered the father of Proton, said: "They say Proton is my brainchild. Now the child of my brain has been sold. I am a sissy. I cry even if Malaysians are dry-eyed. My child is lost."

It's vintage Mahathir, well-known for his sharp wit and candour and hardly surprising, too. But in business there is no place for self-pity or sentiment when the survival of the business is at stake.

To put it bluntly, such sentiment is misplaced and even irrelevant.

Such is the situation facing our national carmaker and the sale of virtually half of its stake to China's Zhejiang Geely Automotive Co Ltd is purely a business decision. Period.

Proton cannot afford to pass up yet another crucial opportunity that came knocking on its doors from a white knight to steer the company out of a future that otherwise looks gloomy.

It did so once and on hindsight what a horrible decision it turned out to be. Here we are talking about what journalist Jagdev Singh Sidhu described as a "final political manoeuvre" that killed at the eleventh hour Proton's deal about 10 years ago to sell a controlling stake to the legendary Volkswagen AG ( VW).

That's what happened when politics got in the way of business and as Jagdev rightly points out, that interference sealed Proton's fate.

And this time around, full credit must be given to our political leaders for their wisdom and foresight to allow the deal to go through.

One can imagine Proton in good hands and having reversed its fortunes had the 10 long years not been wasted by political decision or sentiment.

After all, VW is one of the world's greatest carmakers with international tentacles and Proton would not be suffering from the limited local car market that it rolls out its cars for.

There are not many countries that have a national car industry because of the sheer economics of such business and the economies of scale and well before Proton came into being some 35 years ago, many prominent economists warned Mahathir against the national car project.

But he would not have "No" for an answer as far as his pet project was concerned and the rest is history.

One cannot imagine how much government subsidies and grants and other forms of incentives and protection have gone into sustaining the national car industry and along the way it was Mahathir, too, who curiously allowed a second national carmaker, Perodua, to be set up.

Perodua first tied up with Japan's Daihatsu to assemble the compact Kancil and later with Toyota to give Malaysians the popular Myvi.

Myvi virtually ate up the sedan market segment for the average Malaysian while Proton, which has higher production, and research and development costs than Perodua as it had to start from scratch to produce its models, keeps falling behind in market share.

Proton suffers from not having a level playing field even on its own turf and this compounds its woes.

And now that Geely, which among other things owns Volvo, once a Swedish company, has become Proton's strategic foreign partner, it's incumbent on all Malaysians, the former prime minister included, to wish them all the best instead of being narrow-minded about it.

What is it that we want? Certainly it's in the best interest of Proton to have such a strong partner instead of going it alone and not seeing the light at the end of the tunnel.

In fact, we must say a BIG thank you to Geely.
Imagine what the future holds for Proton with the Asean market looming and having one foot in the Chinese market, by far the world's largest market for anything under the sun.

National pride, if any, dictates that Proton must be able to sell its cars to the world market and since Proton is a Malaysian brand, why do we still hear some sceptics talking about selling out a national asset? Come on, nothing could be more ridiculous than this.

Talking about Mahathir's brainchild, surely he doesn't want it to die.