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