Government to announce Proton partner in March

The issue of taking over the government’s investment arm Khazanah Nasional’s stake in Proton continues to make the news, with the most recent update saying that a decision will be announced sometime in March 2007.

Naza has submitted it’s proposal and presented it to the relevant officials on Thursday last week, and it will be considered together with other proposals from local firms like the Mofaz group and DRB-HICOM. DRB-HICOM took a different approach to it’s proposal, with what I perceive as a two prong attack – number one – it says it can help Proton, we’ve read about that before.

Number two – it says it has no choice but to win the bid because if it doesn’t, DRB-HICOM might potentially tumble down into financial trouble. “We then have to crack our heads (to find a way) to move forward. If we cannot go into the auto industry (in a big way) we would have to move into other areas. But, with 60% of our group revenue coming from the auto sector, we need to take over Proton and protect our current business,” said the groups automotive and component division Tan Sri Abdul Rahman Omar. Since the government has a 39% stake in DRB-HICOM, the group’s performance is of concern as it is also a government investment like Proton.

However, The Edge cited unnamed sources that the government is committed to putting priority on foreign firms rather than local firms, as foreign firms could offer more to Proton. The Prime Minister rebutted this rumour yesterday, saying all proposals would be properly considered and evaluated before a decision is made.

Related Posts:
DRB-HICOM explains 32.9% stake proposal rationale
Volkswagen conducting due diligence audit on Proton?
JMEPA: The reason Volkswagen wants Proton?

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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

  • i'm run (Member) on Jan 09, 2007 at 12:44 pm

    Haiya.. just close laa.. waste money only maa…

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  • siacw (Member) on Jan 09, 2007 at 4:28 pm

    Number two – it says it has no choice but to win the bid because if it doesn’t, DRB-HICOM might potentially tumble down into financial trouble.

    ——————————————————-

    How does taking over Proton will help? If the business is going down and you take ovet a money losing company, it will only pull you down faster, no?

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  • Cire (Member) on Jan 09, 2007 at 4:37 pm

    Its time that the G bite the bullet, and not to offer further assistance to incompetence companies. If there were to be helping hand, it would be done in a smaller scale and with a revamped management team.

    The group would have been doing fine if its management team have not being too complacent on the automotive industry, and fortifying their believe of the fall back net that the G have put up.

    If the DRB partnership are to be packaged into the deal, then they must be prepared to downsize, and the G must not interfere in this program.

    But then, are they ready to accept the fact that hundreds will be out of job in order for the Group to still stay in the automotive scene? Now, need I elaborate further on the outcome?

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  • REDDEVIL (Member) on Jan 09, 2007 at 5:04 pm

    I personally don't think the local company can salvage Proton because they all are merely car assembler rather than car manufacturer. I still believe a foreign partner is needed in terms of their competence, knowlegde and R&D. A JV of DRB-HICOM & VW will be a good option.

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  • pw (Member) on Jan 09, 2007 at 5:26 pm

    Goberman should also sell DRB stake to foreigner. That will solve the fear of the auto biz of DRB going down. I wonder if the foreigner would be interested at all…

    The Goberman should not pretend it knows how to do biz in auto industry and leave it to the pros who has been in biz for so long and surviving world wide.

    Goberman boleh …

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  • whatsoever (Member) on Jan 09, 2007 at 6:07 pm

    yada yada yada. Later In march will said the decision willdelay due to …..

    Anyway, Proton is expecting someone to help. But this DRB expecting proton to help their business. Stupid.

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  • lembagatanah (Member) on Jan 09, 2007 at 6:13 pm

    just hoping proton will come out with better outcome, whoever buying the stakes

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  • khimfoh (Member) on Jan 09, 2007 at 7:08 pm

    "However, The Edge cited unnamed sources that the government is committed to putting priority on foreign firms rather than local firms, as foreign firms could offer more to Proton."

    It would be better for everyone if a foreign automotive company takes over management control of Proton. I doubt DRB-HICOM has the expertise and experience to manage Proton in the long run. If DRB-HICOM were to be given the go ahead to take over Proton, it would be 'the blind leading the blind'.

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  • Jay (Member) on Jan 09, 2007 at 10:49 pm

    Haiyo just close shoplah, always there is hype. The final product is hopeless ! After all the complaints over all the years including the current Gen 2 i thought they would improve the most awaited Satria Neo ! Guess what same old story !

    Piece of shit, can count those Neo's on the road, sales plunging already. Some info below;

    Perdana – heavy maintanence, never changed much from the 1995 model….just tambah v6 engine only…same old technology !

    Putra – good car but no longer available …. no replacement model either !

    Wira – I like the most ! maintanence ok, but it has been on the road since 1993, come on man !

    Iswara – another example of milo tin, worse than its predecessor ! more than a decade too. 1992 and same technology !

    Gen 2 – haiyo, another let down. Campro what ? pick-up like shit from stand still…unless play the gear & consumption oh my goodness ! mileage drops drastically !

    Waja – another lousy product ! handling good what's the use, we need reliability too guys ! 60litres for a 1.6. It's way to much with the current petrol price.

    Savvy – Speechless !I don't know what the R & D is doing !

    Come on Potong learn from your smaller brother !

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  • offroader manix (Member) on Jan 10, 2007 at 1:16 am

    I think government shud sell stake on both side……and let a foreigner to take over.

    Naza and DRB Hicom are the other 2 jokers in the market.

    Maybe by this year all AP will be cancel so no more recond cars to stablise the market in the auto industry. Fake AP and all those jokers will be wiped out overnight….

    HOW PEACEFUL !

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  • auctioncenter2u (Member) on Jan 10, 2007 at 1:49 am

    Did you all read Yesterday newspaper?

    // Dr M proposed to Change the Management in order to rescue PROTON.// But, Change to WHO? HOw?

    I think this so-called Proton's advisor had became MAD, since NOBODY will listen to what he said now.

    PITTY this Dr. M, he should stop giving any advises to the G and PROTON now since his OLD Friends or Cronies had changed their LOVERs to ABB already.

    TOO BAD!!

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  • Joe Ooi (Member) on Jan 10, 2007 at 2:33 am

    Number two – it says it has no choice but to win the bid because if it doesn’t, DRB-HICOM might potentially tumble down into financial trouble. “We then have to crack our heads (to find a way) to move forward. If we cannot go into the auto industry (in a big way) we would have to move into other areas. But, with 60% of our group revenue coming from the auto sector, we need to take over Proton and protect our current business,” said the group’s automotive and component division Tan Sri Abdul Rahman Omar. Since the government has a 39% stake in DRB-HICOM, the group’s performance is of concern as it is also a government investment like Proton.

    ———————————————–

    This is what I posted before that predict quite accurately about real intention of DRB-Hicom to take over Proton is basically desperate to save themselve: –

    DRB-HICOM explains 32.9% stake proposal rationale
    http://paultan.org/archives/2006/12/17/drb-hicom-…

    ——————————

    Joe Ooi said,

    December 17, 2006 @ 11:10 pm

    “DRB-HICOM has presented their rationale for their proposal to buy 32.9% of Proton to the Cabinet commitee on transportation last Monday. Among DRB-HICOM’s plans for Proton if the government allows them to take over part of their 39% stake in Proton is the merger of Proton Edar and DRB-HICOM’s distribution unit EON, which also sells Proton cars amongst other marques.”

    Joe Ooi – The problems are P1 aging and stone age models can’t sell in the market yet couple with unfavorable auto market and there are latest models in the market like MyVi that eat into P1 market share. Whether Proton Edar and EON merge or not, it won’t boost the sales of P1 cars!

    ————————–

    “DRB-HICOM says it can turn Proton into a profitable company within 2 years. DRB-HICOM also has no issues with working with a foreign partner in efforts to turn Proton around and lead it towards success.

    Joe Ooi – This is the biggest cock talking by saying can turn around P1 in two year. Look at link below which is posted previously in other thread as well: –

    http://www.asiaweek.com/asiaweek/97/0411/aa7.html

    Quoted from Asiaweek, in 1997, DRB Hicom boss make this statement – “Toyota. Ford. Mercedes Benz. Proton? Malaysia’s national car wants to be world class. Saleh Sulong(interview), the new boss of Proton’s parent DRB-Hicom, aims to make it so.”

    That is 1997 (approximately 10 years ago), to make P1 world class on par with Toyota, Ford, Mercs once Tg Malim plant is completed! If they take over by Feb 2007,means to turn around on or before Feb 2009 – so this is 12 years different? If DRB Hicom can lead P1 to success, then it should done it 10 years ago. Today P1 shall be world class player “mint foreign currencies” to enrich Bolehland by fully utilize Tg Malim plant by exporting at least 1 million car a year! Where is this talking by Datok Salleh Sulong 10 year ago, and today send in new guy to talk about same old “success story”………..

    Huh, huh, talk is cheap………………….

    Look at DRB Hicom webpage: –

    http://www.drb-hicom.com/net1/pubshr/pubstore/tmp…

    Look at investor section,

    Net(loss)/profit attributable to sshareholders for end March 31

    2005 – profit RM 141.407 Million)

    2006 – loss (RM 203.981 Million)

    Currently P1 losing around RM 80 million per month. That means if P1 unable to increase export market yet domestic sales shrinking, and the likely scenario is the losses is at least maintain if not increase. DRB-Hicom have to bear approximately 1/3 (based on proposed acquisition of 30% ++ of P1 share) x RM 80 Million = to bear loses of around RM1 million a day! Current DRB-Hicom also at loss how to turn around P1 with bigger loses?

    ————————–

    “If no foreign partner is selected, DRB-HICOM already has existing working relationships with Renault and GM.”

    Joe Ooi – If no foreign tie-up means the worst – no transfer of technology, no new model(s) at least assist by foreign partner but current bad quality issue will not resolve. That means Proton Edar or EON or merge entity will sale P1 existing models as well as any brands under their stable.

    What tehnological synergy DRB Hicom can gain from Renault and GM except selling their cars? How DRB Hicom that is basically is a car distributor only is able to help P1 to turnaround without foreign tie up given P1 desperately need tech transfer?

    —————————

    “DRB-HICOM executive adviser of the group’s automotive and component division Tan Sri Abdul Rahman Omar says he believes DRB-HICOM has a 100% chance, as it makes sense for the government to put Proton under DRB-HICOm considering ………………….”

    Joe Ooi – If it make sense if P1 put under DRB Hicom, there is likely one “miracle” they hope for: –

    If VW come in as technology manufaturing partner with P1 and produce new model(s) for Proton just like Skoda, that means DRB Hicom if succeed in control P1 marketing arm through EON/Proton Edar can become dominance distributor for cars again in our local market. This will generate income to overcome it current loses. Failure to secure P1 share by DRB Hicom will lead to bleak future as other brands under GM (Chevy) and Renault not doing well!

    Instead of DRB Hicom turnaround Proton to become “success” within 2 year, the real WHITE KNIGHT is if VW come in, it will turn around BOTH DRB Hicom (if they succeed in take over the 30%++ P1’s share) and Proton which are both currently facing hundred of million loses. No foreign tie-up means DRB Hicom come in just to screw up the situation only! No more no less ………………

    “Conspiracy Theory” – The real scenario is DRB Hicom desperately want P1 marketing arm because it view if VW controlling P1’s manufacturing arm, it will at elast indirectly turn around and save it future. “But don’t treat VW is dumb and can’t smell what DRB Hicom is cooking stinking dish……!!!!!!!!” This is the real logic ………

    Let this corporate crocs put up any show or cock talking as they want. But for us as consumers …. STOP THE BUYING = STOP THE SUCKING.

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  • Initial D (Member) on Jan 10, 2007 at 4:29 am

    O.o …….. march……….nah, there's alwaz news, so i am used to it. dun tink anythg super will arise though.

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  • normal_user (Member) on Jan 10, 2007 at 4:39 am

    I just dont understand. Was it understandable by all parties that Proton at the Holdings level is open up for local companies, while the controlling stake of the Proton Manufacturing is to be sold to foreign partner. Sheesh. I'm tired of this sick development.

    My hope of VW being Proton's strategic partner (and owner) seems to fade away….

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  • Joe Ooi (Member) on Jan 10, 2007 at 6:07 am

    The way our G talking seem look like foregner very keen on Proton! Sigh …….

    Only crap local distributor and assembler "interested" for saving themselve and/or to overcome abolishment of AP by 2010 when it is no longer exist!

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  • offroader manix (Member) on Jan 10, 2007 at 6:32 am

    I don't think they can……2010 is a long way…..maybe by next year already wipe out.

    Our economy is really bad at the moment…..the government cannot tell the bank to relax the stringent rules on the buyer now. The banks are at risks now. Many seems can't pay at all. So why bother. Proton is badly hit with all the kampung sales gone…….city people have choices…..some may and some don't

    The government can't do much now……kinda broke…..

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  • Joe Ooi (Member) on Jan 10, 2007 at 8:11 am

    Finally, market forces seal the fate of P1 and no amount of laws can be passed by G like the crappy NAP no longer able to protect it anymore!

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  • protonGL (Member) on Jan 10, 2007 at 12:18 pm

    with help from vw, continue the ceased brazil's old beetle (early 70 model) ,but in low volume production for export, complete with injected boxer engine, 5 speeder or autobox optional, with acc, abs, discs,coil spring suspension, optional covertables, ….californian and floridan will buy this reincarnation, even the german, will buy their own history, ….

    rich people from all over the world will buy this toy.

    (bit off topic)

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  • protonGL (Member) on Jan 10, 2007 at 12:19 pm

    another tale lah

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  • cyborgx (Member) on Jan 10, 2007 at 3:56 pm

    later Proton signs the Memoirs of Underwear (MoU) for another 3 months, evaluate partnership another 5 months, and blablabla. Same sh!t repeating.

    Proton = national shame.

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  • w_lighter (Member) on Jan 10, 2007 at 5:54 pm

    Badawi might just fall asleep again and "unknowingly" sign off P1 to DRB instead…. u mark my words… history will repeat itself.

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  • figo (Member) on Jan 10, 2007 at 6:46 pm

    This is not an easy decision to make for proton/G. anyone take over will kill others.

    As an example:

    If proton sell to VW and produce better quality product with the cheaper price. (Without G tax) Who will suffer?

    (i) All the useless middle man suppliers.

    (ii) Non productive Management Staff and useless workers

    (iii) AP’s cronies will suffer if their quality product not as good as the VW.(you are no going to buy Kia/Hunydai if VW selling the same product with a cheaper price).

    (iv) 51% stake to WV and Proton no longer belong to Malaysia.

    (v) Toyota/Honda/Nissan/Produa will have a tough time to meet their target of sale or maybe close shop and more unemployment. (Just imagine if 2 litre car like BMW/Audi /VW selling at 100K.Which one to buy?)

    (vi) Others…etc.

    This is why all the AP’ cronies company try to take over proton to protect their interest. (At least another few years before tax abolish ~ 2010) with rebadged production without any competition from external source.

    Lastly, I don’t think the present G will let this happen and kill their existing cronies.(let proton die and help their cronies OR let proton survive and kill other AP King but proton no longer belong to Malaysia)

    So which way to go?

    My vote is for local cronies to take over and give them another few years of protection.(they can’t survive with open competition)

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  • hameed koyakuti (Member) on Jan 11, 2007 at 10:21 pm

    AFTA or not, investors are still skeptical of Thailand's economy and political situation………

    http://www.ft.com/cms/s/b386b560-9f74-11db-9e2e-0…

    That's why Msia a bit careful about AP, duty and tax………Msia Boleh……..

    Thailand – language barrier, political

    Spore – expensive factors of production

    Filipin – labour force prefer to be singers and guitarist

    Indon – productivity per labour is half…….they need 2 men to do 1 job………

    Vietnam – cheap n skilled labour, but lack of internal security

    Ideal place to invest in auto industrie……….guess where……??

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