What has Proton been up to?

A few interesting things have been happening in the Proton stables. Let’s have a look at them one by one shall we.

On the 26th of January, Proton’s new chief executive Syed Zainal Abidin Syed Mohamed Tahir issued a press statement that Proton’s woes on cost effectiveness, quality control and model line-up would be solved by the end of the year. A very optimistic announcement, and I suspect this might be to save Proton shares from dropping any further. Syed also said Proton would be phasing out the Wira and Iswara models, though no indication of when was given. Proton will also focus on exporting to China and India.

We then had Mitsubishi Motors announcing that they were open to alliances, but there would be no chance of taking up equity. Yesterday, Proton and Mitsubishi announced the revival of their old alliance since early Proton Saga days. The alliance would be more of a technology transfer alliance just like before. I’m sure many would be glad to hear this, as generally Japanese technology-based cars are cheaper to maintain and have higher residual value here in Malaysia.

However in the same report Syed Zainal was quoted to say Proton was unlikely to turn around within a year. “In the auto industry, a change is not going to happen in one week, even one year,” he said. A sudden change in attitude, barely a week apart.

In other news, Volkswagen and Proton officially ended the Memorandom of Understanding signed back in October 2004 and have agreed to collaborate on technical and training projects. A report by Business Week had the interesting title of “Proton to buy parts from Volkswagen”.

To me it doesn’t really make much sense to have partnerships with both Mitsubishi and Volkswagen, and even recently Petronas on technical issues. This muhibbah rojak wouldn’t help with Proton’s economies of scale at all. What we have now is a few different platforms, old and new, using engines from 3 different manufacturers (Mitsubishi, Renault and Campro). Are we about to throw Volkswagen and Petronas into that mixture? Proton needs to have only one or two platforms that can be adapted to numerous body styles, like Lotus Group’s Versatile Vehicle Architecture. With common parts.

Anyway one of the reports had something interesting that should give us a clue on when the Proton Satria Replacement Model would finally be launched. Syed said a new model is slated to be launched in April or May this year.

I think Super Syed (as he is called internally) definitely is taking Proton in the right direction in general, but all that matters now is the execution of things. As managing director he cannot be micro-managing everything, and it requires a total team effort to pull this off. PR stunts like “we can change within one year” might just be a morale boosting exercise, or might be an effort to save Proton share values from plunging but this sudden change of attitude could be damaging, especially since the rakyat is pretty wary of Proton right now. After all, these days in the era of super chief executives, the head honcho of a company has his own branding as well and what that branding is does affect things. Have a look at Tony Fernandes for example, going everywhere with his Air Asia cap. It would not do Proton good if Syed is labelled as someone who trash talks.

Sources:

Proton to turn around in one year.
Malaysia’s Proton renews Mitsubishi Ties.
Proton to buy parts from Volkswagen

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • Wai (Member) on Feb 03, 2006 at 11:58 am

    True, economies of scale and QC is the main focus for Proton, we Malaysians are a simple bunch, satisfy our needs and meet up to standards and we will automatically support you.

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  • cbljkkj (Member) on Feb 03, 2006 at 1:05 pm

    Its almost as if Proton is using the 'Prime Pushing" tactic which is commonly used in recuperating an economy which is in recession back to it's prime state.

    It is very possible that those words were uttered just to keep the Proton shares afloat and the other bits of news and hype to keep customers on the edge of their seats. One thing I don't get is the absurd amount of time Proton is taking just to release the Proton SRM.

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  • stevarac (Member) on Feb 03, 2006 at 5:37 pm

    What kind of tech transfer or collaboration that Proton can expect this time ? Their previous partnership after so many donkey years did not contribute to any significant transfer as far as the models and car spec that is produced from Proton. It is more like learning how to dress up an old lady with new fashion apparel .

    It is quite clear now Proton is in semi-panic management and trying to buy some time to put their house in order and I agree that the eroding share prices is a paramount factor.

    Still , I STILL hope that Proton new CEO will act fast on the QUALITY issues which he himself admit on TV  need to be tackled efficiently.  Any management worth 2 sen will know for a fact that QUALITY is the lifeline or heart of an manufacturing operation.

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  • i'm run (Member) on Feb 03, 2006 at 10:43 pm

    Talk.. talk.. and talk again.. thing are easy said than done..

    Well will see what they really gonna do….

    And what…? SRM is due to April/May..

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  • outspoken (Member) on Feb 03, 2006 at 11:00 pm

    lets not jump into conclusion just yet. The collaboration between proton and mitsu, vw and pet might been in different categories. With mitsu it might be for cars under 1.6cc, vw on special projects or cars obove 2.0cc (i.e suv, new perdana) and obviously with petronas it is more , i think, a short term plan ( it might just for eo1 engine and hybrid projects). And hey, they might just cooperate on chasis/platform , not the engine. who know? proton is in a minor retructuring right now, better let them a chance to prove that they worth their money. I will , for sure, reserve my judgement until the next model comes out (the one after SRM i mean!!)

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  • nizam80 (Member) on Feb 04, 2006 at 9:20 pm

    So, does this mean that they are going to stop using Campro and Renault engines after the SRM release??

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  • rocknroll (Member) on Feb 08, 2006 at 6:46 pm

    Proton was the pride of Malaysian when it launched its first car 20 years ago. Partnership with Mitsubishi seems to be a good stepping stone to grow our own capability to make cars. Hence Proton grew bigger and bigger under protective environment.

    But Proton did not learn as years goes by. They did not learn enough technology from Mitsubishi. They are content with profits from distorted car pricing in this country. Its sourching department so corrupted that cause poor quality of parts.

    Years goes by, they are late in launching replacement model, leading to fall in market share. To break away from this bottle neck, they bought Lotus. You can do anything with money. Now, Proton get Lotus to design Waja suspension because they can not do the job after 20 years! It is the same stories with so called Campro engine. Relationship with Mitsubishi turn sore.

    Now, the couple is getting back together again. No good wishes from me.

    20 years ago, we were still laughing at Koreans as they can not make a car themselves but, now, Korean had progress so much that they are selling their Hyundai like hot cakes in US while we cannot sell a Waja in Australia.

    My advise is take away the protective scheme, let Proton shed off the old skin. Let people with caliber to run this industry disregard their race, from top to bottom. Don't make it a national agenda to protect Proton, or this bird would not know how to fly in another 20 years time!

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  • rocknroll (Member) on Feb 08, 2006 at 6:49 pm

    Hey guys,

    Besides getting a new engine and a chassis, we also need a good GEAR BOX for optimum fuel and power! Never hear anything about it from Proton.

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  • Jake (Member) on Feb 09, 2006 at 1:01 am

    well Paul, i think this Super Syed is not bad, so far so good!

    first the deal with mitsu, it's more like back to basic, be practical and taking the safer way; by going japs, at least in Malaysia, proton can definitely sell hordes of cars; Malaysians love japs; recent case study myvi versus savvy

    secondly, the deal with volks is mainly contracting to assemble volks cars for local market and the region; even the deal with mitsu also has this assembling mitsu cars….just like what perodua with toyota doing i.e. perodua assembling avanza

    really, Super Syed, you're not bad at all, keep going..and another thing, Syed also into track racing by sponsoring our A1 racing team.. ;-)

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