Proton a gem in the eyes of foreign carmakers
TWO huge car companies with global operations are neck-andneck in their bid for a majority stake in Proton, with both offering many sweeteners to win over the national carmaker.
To these bidders, Proton could be a very valuable company when placed in a global context, according to analysts.
The two — Zhejiang Geely Holdings Group of China and PSA Group of France — are regarding Proton as a strategic fit to their plans for global domination.
Proton is pivotal in realising a strategy that will see the carmaker anchoring the Asian leg of a multi-continent automotive footprint.
For starters, Proton remains as Asean’s only full-fledged car manufacturer that conducts its own research and development, design, manufacturing, distribution and sale of cars.
A Proton deal is strategic in several ways — first, it being the only car manufacturer in Asean; second, its operations can be quickly bolted on to a bigger global player such as Geely and PSA; and lastly, it is located right in the centre of Asia, the world’s fastest growing economic region.
Proton’s assembly plants in Shah Alam and Tanjung Malim have a combined capacity of up to 400,000 cars per annum.
Large foreign car players are aware that Proton sits on a readymade car ecosystem and infrastructure. It would be “plug and play” for any player that wants to expand into Asean region.
It has been argued that Geely or PSA could easily start a “greenfield operation”.
But greenfield car manufacturing operations would run in excess of US$2 billion (RM8.87 billion) and may take three to five years to complete.
This “greenfield option” was actually mooted by PSA as its first option to establish a manufacturing footprint in Asia, until Proton came along looking for a foreign strategic partner. This was the turning point with PSA deciding to focus its attention on Proton, a car manufacturer with 30 years of hands-on experience and whose vendor ecosystem spans the A-to-Z of car manufacturing.
PSA much prefers the Proton route, describing the move a clear way “to avoid beginners’ mistakes” when entering Asean.
Through Volvo, Geely has a strong global brand but no manufacturing facility within Asean, making it strong in China but weak in fast-growing Asean. Again, Proton can step in to fill this gap.
With a foreign strategic partner, the picture ahead for Proton will be almost unrecognisable.
Within three years, analysts expect Proton to come out with a slew of new models through technology and platform sharing as well as a new line-up of sport utility vehicles.
Analysts also expect Proton to be a truly Asean brand with sales of around 300,000 units, or three times its current volume, and within five years, sales will climb to 500,000 when it enters greater Asia. Bernama