National carmaker Proton has confirmed news reports that it is in talks with Detroit-based General Motors (GM). Replying to a query from Bursa Malaysia, Proton said that talks are only at a preliminary stage and there’s nothing to announce for now.

“The Board of Directors of Proton Holdings Berhad wishes to inform that talks with GM are only at a preliminary stage and as such warrants no announcement at this point in time. Should there be further developments that warrant an announcement, the Company hereby undertakes to make necessary disclosure in accordance with the relevant requirements,” Proton told the stock exchange.

People started talking about it last week, when The Edge reported that Proton was in talks to sell 40% to 50% stake in its underused Tanjung Malim plant to GM for between RM700 million to RM800 million. Sources quoted by the report said that if the deal goes through, GM could potentially invest RM300 million worth of equipment in the facility.

Proton chairman Datuk Mohd Nadzmi Mohd Salleh, when confirming his bid for Khazanah’s shares in Proton, added fuel: “There is some truth in the report. However, GM has all along been interested in Proton even when I was the head during the 1990s,” he said.

Proton chairman Datuk Mohd Nadzmi Mohd Salleh has confirmed that he is one of the bidders for Khazanah Nasional’s 42.7% stake in the national carmaker. Apart from this “management buyout” bid, other parties linked to the deal are DRB-Hicom and the Naza Group.

He revealed that Proton’s management took the matter to him few months ago after rumours of interest in Proton from various parties surfaced. They then asked him to make a bid for it because of his experience in setting up Proton and leading the group in the past.

Nadzmi believes that privatisation is the way to go for Proton, which would enable him to restructure the whole group to turn it around. “I know the business well, and Proton is close to my heart. There is a potential in Proton and that is why I dare to make a bid, and the offer runs into billions,” he told StarBiz.

He however did not reveal the offer that he had submitted, saying that an offer for the net tangible asset price of Proton will be too high as Proton is not an easy project. The man added that he is already in talks with some foreign banks regarding financing.

He has firm plans to recoup back his investment, should he succeed. “It is all about how you juggle your assets. This could be done by increasing the utilisation rate of Proton’s assets, cost reduction and also increasing Proton’s exports. These steps could easily add a further RM500mil to RM600mil to Proton’s bottom line.

“Besides the increased utilisation of the Tanjung Malim plant, Proton needs to transform itself to be a global player, and I believe the upcoming model codenamed P3-21A will be the global car that will transform Proton’s DNA. The car will be a completely different car with better material and design coupled with modern features. One thing is for sure, Proton’s DNA will shift to a higher gear with the plans in place,” he said.

Speaking of Tanjung Malim, which is utilised at an average of 52% now, “Proton can raise its utilisation rate by having tie-ups with other brands to assemble or manufacture their products,” Nadzmi opines, while confirming reports that General Motors (GM) is interested in the plant.

Tie-ups with foreign parties is key, citing examples like Proton’s recent deals with long time partner Mitsubishi and Chinese company Hawtai, but Nadzmi does not believe that Proton needs a global OEM to turn the company around. “I hope to do a lot more tie-ups with other brands, as Malaysia today has a lot of capacity, with more collaborations and on a multi-franchise business model, it would be easier to control the local automotive industry.

“Contrary to what some might say, that Proton needs a global OEM to turn the company around, Proton is essentially a brand with Asian roots. How would it fit into the portfolio of a global OEM with its collaborations with MMC and other joint ventures? It would clash with the interest of Proton whereby OEMs like MMC would not be willing to collaborate further as they would run the risk of exposing trade secrets to third parties in the form of another global OEM in the picture,” he explained.

How about the cash hungry subsidiary Group Lotus? “If I buy Proton, I will cut it off, and probably retain a 20 to 30% stake, which translates to a lot of savings every year. There is a lot of potential buyers for Lotus, and once a deal is signed it will be written back to the books of Proton,” he said.

Proton has announced an extension of the end date of its free rear centre lap belt installation service from 31 December 2011 to 31 January 2012. This is due to poor response so far – only about 17% out of the 225,930 affected Proton vehicles have been installed with the rear lap belt, to date.

Since the Government first announced in June 2008 to make it compulsory for vehicles to be fitted with the lap belt, Proton has been installing it at no cost to owners of the Saga LMST and Gen.2 models manufactured between 2004 and 2008.

In September this year, Proton embarked on an outreach programme consisting of roadshows and on-ground activities across the country to create awareness on this matter. This included setting up hospitality and safety marquees at highway R&Rs in Dengkil, Ayer Keroh, Gunung Semanggol and Temerloh, and pamphlet distribution at selected tolls.

Stepping up efforts, Proton Mobile Teams (eight teams of four technical personnel) were also dispatched beginning early this month to used car outlets and locations such as mosques, hypermarkets and petrol stations.

“We would like to urge our customers with the affected cars, and Malaysians in general, to not only comply with the new ruling to avoid getting fined by the authorities, but to adopt the practice of using seat belts for rear occupants in the name of safety. We also urge parents to take up the habit of ensuring that their children who are seated at the back are properly belted up,” said Proton Group MD Dato’ Sri Syed Zainal Abidin.

With this extension, Saga LMST and Gen.2 owners who have yet to fix their rear centre lap belts can make an appointment at authorised Proton Service Centres to have it done. Installation will take approximately 15 to 20 minutes per car.

Proton has announced a nationwide ‘Proton I-Care Prihatin Banjir’ flood relief programme to assist victims whose Proton cars have been damaged by rising waters. The programme starts today (29 Dec) and will run till 29 February 2012.

Basically, Proton I-Care Prihatin Banjir offers affected Proton car owners free inspection and assessment of damage, free towing within a 5km radius of selected Proton authorised service centres and a 20% discount on Proton Genuine Parts.

“We understand how difficult it can be for people who are affected in flood-prone areas. Year after year they face the same problems and damages to their property and belongings, which may include their Proton cars. For most families, it can be one of the biggest spending of their household,” said Ahmad Suhaimi Mohamad Anuar, CEO of Proton Edar.

“Previously, flood was a common occurrence in the East Coast but nowadays it happens all over the country, even in KL, when you least expect it. With this programme and customer care being our top priority, we hope to do our part in helping to relieve the burden of our valued customers,” he added.

This is part of Proton’s community outreach programme, which will see roadshows in Kelantan, Perlis, Pahang and Johor. The tour started last week in Kelantan and Perlis. Upcoming dates and venues are as follows:

At the road shows, Proton technicians will share with owners how to handle flood-affected vehicles. Proton owners are also entitled to a free 18-point safety check and free rear seat belt installation. The latter is the last chance to do so before the regulation is enforced by the government beginning 1 January 2012.

Customers are also invited to forward queries regarding flood affected cars or show up in person at any Proton service centre for guidance. For towing services and related enquiries, one can call Proton I-Care at 1300-880–888 or 1800–888–398.

Future roadshow venues and dates will be announced in due course.