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Reports: DRB-Hicom to cut Proton’s costs, review Lotus

January 18, 2012 at 9:10 am By Danny Tan Filed Under Cars, Local News, Lotus, Malaysian Makes, Proton

Now that DRB-Hicom is in control of Proton, what’s in store for the national carmaker? A report by Business Times details the changes that will happen in terms of cost cutting and efficiency, trimming “excess fat” currently carried by Proton. The reporter quoted unnamed “sources close to the deal”.

For starters, no large scale staff retrenchment is expected, although some changes in the top management are predicted to happen. DRB-HICOM wants to turn Proton into a serious regional player within three years, before becoming a global player two years from that point. The conglomerate will also strengthen Proton’s vendor and dealer network, while improving staff skills by leveraging on its International College of Automotive (ICAM) in Pahang.

“There will be zero lay-off as the immediate focus is on the low-hanging fruits at Proton. The group will trim any excess fat in product planning, consultancy contracts and third-party service providers, among others,” their sources said.

An example is the storage of Proton cars at a third-party site in Sijangkang, Selangor. “The group does not think it is necessary to farm out this logistic service as Proton cars can be distributed to dealers and branches efficiently by using a good IT infrastructure. A lot of money can be saved from this,” they added.

When it comes to costs, Lotus is sure to crop up. Now that DRB-Hicom is in control, what is in store for Proton’s sports car subsidiary? The British brand is currently in a cost consuming revamp from niche specialist sports car maker to a Porsche challenging brand, led by CEO Dany Bahar, who is fresh from signing a four-year contract last month.

“If Lotus continues to ride on Proton, it will be cancerous, it will be like a parasite. Hence, it requires a review so that it can stand alone and be successful, perhaps like what Audi is to its parent Volkswagen AG,” BT’s sources said, adding that the review will focus on Lotus’ involvement in motorsports sponsorships, especially in F1.

If this report is accurate, there is sure to be plenty of boardroom battles in Proton, in the near future.

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DRB-Hicom picked to get Proton – what will happen next?

January 17, 2012 at 2:17 pm By Paul Tan Filed Under Cars, Proton

The chart above shows the share price movement for Proton Holdings Berhad for the past 3 months up to yesterday. It settled down at RM5.18 yesterday, and previously hit a high of RM5.53 on the 13th January 2012. If only we all knew what was going to happen back in late November last year eh? It would have been a nice windfall just in time for the Chinese New Year this month.

Khazanah Nasional’s statement yesterday said DRB-Hicom had been identified as the appropriate party to acquire KNB’s stake in Proton as it’s proposal had demonstrated the company’s extensive involvement in the automotive sector, its network of strategic partnerships both local and international, and an effective platform to enhance Proton’s sustainability and meet its long-term growth needs. It’s RM5.50 per share offer price was also acceptable to Khazanah.

DRB-Hicom’s stake in Proton will rise from zero now to approximately 42.74% after the transaction is done – a total of RM1,291,040,812 in cash will change hands, with probably even more to be paid out later when DRB-Hicom makes a mandatory general offer for all remaining Proton shares after the acquisition is done.

This is not the first asset that DRB-Hicom owner Tan Sri Syed Mokhtar Al-Bukhary has acquired from Khazanah. He also paid RM623 million in cash for Khazanah’s stake in Pos Malaysia via DRB-Hicom, and the turnaround is already underway, with DRB-Hicom saying they have identified 17 new businesses that it could tap into via Pos Malaysia.

If you know Tan Sri Syed Mokhtar Al-Bukhary’s style, he will most likely install his own general to head Proton. When he took over Pos Malaysia, he made Datuk Khalid Abdol Rahman the group CEO. Datuk Khalid was previously DRB-Hicom group director of corporate planning. Who will be Proton’s new chief, or will DRB-Hicom choose to retain Datuk Seri Syed Zainal?

There are more questions of course. What are DRB-Hicom’s plans for Proton? These details are all in the proposal to Khazanah, not not available for public viewing. Will DRB-Hicom matchmake Proton and Volkswagen? If yes, how do they intend to do it? Who will they retain and who will go? What fresh blood will they bring in? An/d will DRB-Hicom continue to ask for special privileges from the government for Proton – if yes, for how long? And what will they do with Lotus?

The answers to these questions will be revealed in due course!

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Group N Proton Satria Neo rally car goes on sale in Japan

January 17, 2012 at 12:15 pm By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Motorsports, Proton

Proton Motorsports and renowned Japanese automotive parts manufacturer Carrosser Co Ltd (CUSCO) announced at the Tokyo Auto Salon that the Satria Neo will officially go on sale in Japan for motorsports use. CUSCO is the authorised Proton reseller in Japan and is responsible for the importation and distribution of the Neo in Japan.

This is the fruit of Proton Motorsports and CUSCO’s joint-development to produce Group N 1600cc Proton Satria Neo rally cars, which was first put on display at the 2011 Tokyo Auto Salon.

The cars competed in last year’s Asia Pacific Rally Championship (APRC) and made a clean sweep of the 2WD categories, winning the APRC 2WD Manufacturer’s title, APRC 2WD driver’s title (Karamjit Singh) and APRC Junior driver’s title (Akira Bamba). Meanwhile, in the Japan Rally, Shuhei Muta also drove the Satria Neo to win the JN3 Class title.

Developed for the Japanese domestic market, the rally cars are sold by CUSCO to those competing in the Junior Rally Championships in Japan and Asia Pacific. Proton and Carosser have also jointly-developed Group N components for rally use on the Neo. A well known name in aftermarket performance parts, CUSCO is the only independent firm in Japan to compete in all categories of the All-Japan Championships: track racing, rallying, dirt trials and gymkhana.

“Besides the collaboration on vehicles, we are also looking to expand our business, not only in Malaysia, but globally in terms of jointly-developing performance parts and accessories together with Carroser,” said Datuk Abdul Razak Dawood, head of Proton Motorsports.

“The main objective of this joint-development is to further deepen the prosperous relationship with Proton Motorsports by presenting the Japanese market with a sporty automobile that has proven its capability as a solid motorsports base machine. Moreover, Carrosser will strive to dedicatedly support various teams and end users utilising Proton machines in any given genre of motorsports, especially the APRC,” said Carrosser President Tsutomu Nagase.

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2012 Monte Carlo Rally marks Proton’s return to the WRC

January 17, 2012 at 10:20 am By Danny Tan Filed Under Malaysian Makes, Motorsports, Proton

Today will see drivers Giandomenico Basso and Per Gunnar Andersson lead Proton’s return to the World Rally Championship (WRC) when the Malaysian manufacturer competes at the Monte Carlo Rally for the opening round of the 2012 FIA Super World Rally Championship (S-WRC).

Proton’s participation in the S-WRC comes 10 years after it first won the FIA Production Car World Rally Championship in 2002. Last year was a successful year for the Proton team, which was crowned champion in the Asia Pacific Rally Championship (APRC), clean sweeping every title on offer.

This is Proton’s second visit to the historic rally after making its debut last year on the Intercontinental Rally Challenge (IRC), which is run on a similar but shorter route. Yours truly was freezing himself with the team there last year, sharing the heartbreak of two retirements after so much promise. Better luck this time guys!

Anyway, the S-WRC is a companion series to the WRC and is driven on the same special stages. First introduced in 2010, it is limited to production-based cars homologated under the Super 2000 rules. The S-WRC also splits the Production World Rally Championship (P-WRC, previously open to both Super 2000 and Group N4 cars) into two separate competitions.

Proton will compete in five of the seven S-WRC rounds in 2012, and we hear that some privateers will also get behind the wheel of the Satria Neo S2000.

“We start the Monte Carlo Rally and the 2012 S-WRC season with what is a winning car, having clinched last year’s APRC title, and given the positive results we have achieved in testing throughout the winter break, we look forward to a strong and competitive season ahead,” said Datuk Abdul Razak Dawood, Head of Proton Motorsports.

The 2012 Monte Carlo Rally will be run over 18 special stages totaling 430 km of competitive distance in temperatures as low as five degrees. This year’s 80th edition marks the return of WRC to Monte Carlo after a three-year absence. Flag off is at the French city of Valence with two stages to be run twice before heading to the mountainous Ardeche, Haut Loire and Drôme regions, eventually finishing in glamorous Monaco.

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Six more winners in Proton’s Amazing Holidays contest

January 17, 2012 at 9:13 am By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Proton

Proton has announced six new winners in the second round of its Amazing Holidays competition. They receive a 3D2N holiday stay each, at either The Hard Rock Hotel in Penang, Tanjung Jara Resort in Terengganu or Casa del Rio in Malacca.

The winners are Proton car owners Rizalman ShahBandra from Putrajaya, Noor Fizan Ahmad from Ipoh, Zamri Abdul Malik from Petaling Jaya and Masmira Ibrahim from Temerloh. Winners under the non-Proton owner segment are Chee Sook Fun from Klang and Chong Bing Shan from Kuala Terengganu.

Amazing Holidays is part of the “Very Important Proton” VIP programme, aimed at acknowledging and rewarding customers and supporters.

“Our VIP programme has been truly instrumental in our ‘committed to be better’ initiative as it is an active expression of our pledge towards the improvement of our products and services. We have been very happy with the response received. The positive reactions we have witnessed have been truly encouraging to us as this initiative is instrumental in helping us build stronger relationships with Proton supporters,” said Director of Group Marketing, Branding and Motorsports, John D. Chacko.

Proton’s VIP programme was initiated in the middle of 2011 and lasted throughout the year. Also under the initiative is “My Proton Makeover”, which sees the R3 boys refurbish old Protons. They’ve so far laid their hands on Fadly Hisham Roplay’s 1992 Saga and Sashideran Radha’s 17-year old Wira. Next up is a 1996 Iswara Aeroback owned by Norzamzarini Mohd Bajuri. Keep your eyes peeled for that one!

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DRB-Hicom announces proposal to acquire Khazanah’s Proton stake – RM5.50 per share

January 16, 2012 at 5:33 pm By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Proton

DRB-Hicom, the apparent winner of the tussle for Khazanah Nasional Bhd’s 42.74% stake in national carmaker Proton, has officially announced a proposal to acquire the stake to Bursa Malaysia, as any listed company is required to do.

They will pay the Government’s investment holding arm RM1,291,040,812, or RM5.50 per share in cash. DRB-Hicom also proposes to do conduct a mandatory general offer (MGO) to buy up the shares it doesn’t already own after the deal with Khazanah, as per listing rules.

Minority shareholders will be offered the same price – RM5.50 per share – as the conglomerate is offering Khazanah. Last Friday, before trading of Proton shares were suspended, the counter closed at RM5.18.

The deal is almost 100% done, but for two caveats: the approval of the shareholders of DRB-Hicom at an extraordinary general meeting to be convened AND the approval of or notification to the Ministry of International Trade and Industry (MITI) on the change of shareholder of Proton.

In the proposal, DRB-Hicom also stated that it will not carry out any dealing with any Proton shares within two years from the transaction date, including the disposal of the assets of Proton, or any of its group companies. The company also says that during the period of one year from the completion date, it will not propose or vote in favour of any plans which may result in the dismissal, discharge, retrenchment or lay-off of the employees of Proton and/or its subsidiaries.

DRB-Hicom had issued an irrevocable standby letter of credit in the amount of RM38,731,224.35 representing 3% to the vendor, which is of course Khazanah. Mere formality now, before the official announcement.

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Trading of Proton and DRB-Hicom shares suspended on Bursa, official announcement to come soon

January 16, 2012 at 11:24 am By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Proton

It looks like the battle for Khazanah Nasional Bhd 42.7% stake in Proton has had its winner. Trading of the national car maker’s shares, as well as those from DRB-Hicom Bhd, have been suspended from 9am to 5pm today pending an announcement. The companies did not give details in a filing to Bursa.

DRB-Hicom asked for a suspension in trading, saying the company will be proposing a corporate exercise involving a very substantial transaction.

Reports surfaced last week saying that Government investment arm Khazanah will announce today that DRB-Hicom has won the bid to acquire its stake in Proton, with the transaction said to be at RM6 a share or total of RM1.4 billion.

Other confirmed parties bidding for the Proton stake were the Naza Group and Proton chairman Datuk Mohd Nadzmi Mohd Salleh. The press and/or analysts roped in UMW and even Tan Chong into the party, but both companies denied any invitation to bid and involvement in the sale.

Last Friday, Proton shares closed at RM5.18 and DRB-Hicom’s at RM2.17. Minority shareholders and speculators are waiting to profit from a general offer for their shares, expected to be coming soon.

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Google 2011 Zeitgeist list: Perodua Myvi tops car searches

January 12, 2012 at 5:40 pm By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Perodua

Google has released its annual Zeitgeist list for Malaysia, which ranks 2011’s hottest search terms on google.com.my. Zeitgeist, which is German for “the spirit of the times”, offers a glimpse at the significant whats and whos in the eyes of Malaysians. Since we’re an automotive site, let’s focus on the car list. The top 10 fastest rising car brand searches on google.com.my in 2011 are:

1. Myvi/Perodua Myvi
2. Mercedes
3. Volkswagen
4. Honda Insight
5. Peugeot
6. Lexus
7. Perodua
8. Ford Fiesta
9. Audi
10. Lamborghini

This is a “fastest rising” list, search terms that have seen the largest increase in search volume over the year. Not to be confused with “most popular”, which indicates terms that are most frequently searched.

It’s no surprise that the Perodua Myvi is at the top – it’s Malaysia’s best selling car, and people want to read up before they buy. Also, the new Myvi was introduced last year, before the more powerful SE and Extreme came in September, further adding interest.

Mercedes-Benz came in second, so perhaps it’s the brand most Malaysians aspire to. Continental cars are getting more popular by the day, gaining a foothold in the Japanese dominated non-national segment, so it’s no surprise to see VW and Peugeot in the top 5.

Hybrids are “in” too, thanks to tax breaks, and the sub RM100k Honda Insight is popular both on urban streets and in Google. Another “hot car” is the Ford Fiesta, the stylish B-segment hatch that single handedly revived the Ford brand in Malaysia. A surprise for me is Lamborghini at number 10 – everyone wants a bull as their wallpaper perhaps?

Away from what we all love, here is the overall fastest rising searches in 2011:

1. Facebook
2. Angry Birds
3. Maharaja Lawak
4. iPhone 5
5. Samsung Galaxy
6. iPad2
7. Jawatan kosong
8. Android
9. Tonton
10. Aishiteru

Agree or disagree? Discuss and leave your two cents below!

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UMW says it has no plans to acquire stake in Proton

January 11, 2012 at 8:07 pm By Anthony Lim Filed Under Cars, Local News, Proton

Of late, there has been no shortage of conjecture about the possibility of Khazanah Nasional letting go of its 42.7% stake in Proton, with a number of potential suitors having being mentioned. UMW Holdings Bhd was among those mentioned in some reports, but it turns out that UMW has no plans to acquire Khazanah’s stake, Bernama reported today.

According to UMW’s group chairman Tan Sri Asmat Kamaludin, UMW has a lot on its hands already, and its focus was on its present commitments, mainly the partnership with Toyota and Perodua.

“I think we’ve already cleared that UMW is not making any bids. We at UMW are committed to our partner Toyota in enhancing its business here in Malaysia and making Perodua self-reliant pre- and post-NAP (National Automotive Policy),” Asmat said.

He added that as far as UMW was concerned, the Proton issue had not been discussed at board level, and a bid has not even been considered. “We’ve never made any bids. The reports say that shareholders of UMW have made the bid. I don’t know about that. Maybe you have to ask them,” he told reporters after the launch of the new Toyota Avanza.

Asmat added that UMW had plans to ensure Perodua post survive implementation of the new NAP, where the government has already indicated that it will liberalise the automotive sector by 2016, the Bernama report added. “We have a plan to develop Perodua and make it self-reliant before that,” he stated.

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Proton-GM talks confirmed, at preliminary stages now

January 6, 2012 at 4:22 pm By Danny Tan Filed Under Cars, Local News, Malaysian Makes, Proton


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.

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