Foreign interest will take Proton from local to global

KUALA LUMPUR: News that all bidders are still in the running to be Proton's strategic foreign partner is a strong sign that many parties want to take the Malaysian car maker from local to the global market, a prominent geo-strategist said today.
Azmi Hassan said that looking at similar deals around the world, a number of details ought to be thrashed out at this stage of negotiations between DRB-Hicom Bhd as owner of Proton and the international bidders.
"Ensuring the leap for Proton from a local player to a global market brings into play many dimensions such as technology, platforms, new models and much higher volume manufacturing," he told Bernama.
Azmi was commenting on a statement by DRB-Hicom Group Managing Director, Datuk Seri Syed Faisal Albar, on Tuesday denying media reports that Proton is now left with only one foreign bidder as the prospective foreign strategic partner.
The statement did not reveal the bidders' names but it is understood that they included China's Geely Automobile Holdings and Europe's second largest car maker Groupe PSA, which owns Citroen, Peugeot and DS brands.
Syed Faisal said Proton and the bidders were still locked in detailed and meticulous evaluation process and stressed the importance for Proton and the incoming strategic partner to create synergies that would ensure the success of the partnership.
Azmi said he believed that one issue on the table was the RM1.5 billion soft loan obtained by Proton last year from the government that had big conditions attached to it, as well as the relocation of all its manufacturing to one central hub in Tanjung Malim.
He cited the case of China's Geely which was just a domestic brand in China until it took the bold step to buy out Sweden's Volvo, a global brand, that enabled the company to double its earnings recently, thanks to its Volvo research and development advantage to boost Geely branded sales.
"On top of this, Geely's net profit surged by 126%, its biggest profit growth in eight years, and its share price has trebled over the past 12 months. And under Geely, Volvo has had a resurgence in selling cars globally compared to previously," he said.
"On top of that, the China car maker also bought the London Taxi Co and their line-up of cars in China are actually world class, as much as PSA of France is big and is a strong contender for Proton," said Azmi.
He said it was actually very crucial for Proton to have a strategic foreign partner that has a good business model with a vast market because without it, it would be "very tough" for Proton to expand into the Asian market moving forward.
"We all know about the Asian mentality of owning a car. So, this is a huge potential and within Asean alone the population has reached 600 million. I would like to see Proton reaching out well beyond the Asean market with its incoming strategic partner.
"And it is also very important for Proton to decide on its partner without any political pressure. It should only be based on a commercially correct decision," he added.
He cited the case of Malaysia Airlines Bhd that had taken some bold measures to turn around its fortunes and likewise Proton's decision on its future partner should be purely on a win-win basis and all sides ought to give support to the partnership. — Bernama