DRB-Hi­com an­nounced the sale of 49.9 per cent eq­uity in car­maker Pro­ton Hold­ings on Wed­nes­day. Most view it as a nec­es­sary move to en­sure sur­viv­abil­ity of the brand, but there has been crit­i­cism of the sale as a sell-out of na­tional sovereignty. DRB-Hi­com

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Ques­tion: There has been a mixed re­ac­tion to your an­nounce­ment of Pro­ton’s new strate­gic part­ner last Wed­nes­day. Why was there a need to sell and lose Pro­ton?

An­swer: We need to be clear that Pro­ton is a pri­vate en­tity and has been such since DRB-Hi­com ac­quired the na­tion’s first car­maker in 2012. The ac­qui­si­tion from Khaz­anah Na­sional was an out­right pur­chase and the “golden share” of the gov­ern­ment was re­moved then.

Yes, Pro­ton is the first na­tional car brand by virtue of it be­ing the first car mar­que that Malaysia pro­duced back in 1985. By the same to­ken, DRB-Hi­com re­tain­ing a 50.1 per cent eq­uity means that we still own the ma­jor­ity stake and the brand re­mains a na­tional brand, a na­tional car. But, invit­ing Geely Hold­ing to take up a 49.9 per cent stake in Pro­ton does not equate to us sell­ing out.

Q: You went through sev­eral bids for Pro­ton. Why was Geely cho­sen?

A: I must em­pha­sise that the process we went through was an in­ter­na­tional bid­ding process.

The process took more than 12 months with thor­ough anal­y­sis, site vis­its and de­tailed eval­u­a­tion cri­te­ria to iden­tify a for­eign strate­gic part­ner (FSP) that had the best fit for Pro­ton.

In short, we needed to find a part­ner that un­der­stood what we wanted and what we needed, and was will­ing to take the jour­ney with us to­wards our goals and as­pi­ra­tions.

Pound for pound, Geely was the best suitor. And why is this so, is as fol­lows:

GEELY agreed to re­tain the name­plate and re­claim No.1 spot.

This was an im­por­tant part of our con­sid­er­a­tion be­cause we are a na­tional car and proud of it, and we wish to re­claim the No.1 spot in the coun­try again.

Geely em­braces this re­quire­ment; just as how they re­spected the Swedish when they bought over Volvo.

And, the state­ment by Daniel Li, Geely’s ex­ec­u­tive vice-pres­i­dent and chief fi­nan­cial of­fi­cer at the sign­ing was clear: “Geely is full of con­fi­dence in the fu­ture of Pro­ton and we will fully re­spect the brand’s his­tory and cul­ture, to restore Pro­ton to its for­mer glory with the sup­port of Geely’s in­no­va­tive tech­nol­ogy and man­age­ment re­sources.”

To move fast into the mar­ket, part of the agree­ment is to in­ject a sports util­ity ve­hi­cle (SUV) plat­form into Pro­ton and Geely of­fered their best-sell­ing SUV to us with­out even bat­ting an eye­lid.

This will en­able Pro­ton to en­ter a new seg­ment and a seg­ment that has grown tremen­dously over the last few years.

GEELY is com­mit­ted to grow Pro­ton be­yond Malaysia.

This is an im­por­tant ele­ment to us as we wish to be the top three in Asean mar­kets un­der the brand of Pro­ton.

Geely’s strate­gic vi­sion on this is very aligned with us. They wish for us to grow as one of the big­gest auto play­ers in the re­gion; not just ex­port­ing cars to other coun­tries.

In fact, they have an am­bi­tious tar­get of 500,000 units in an­nual sales by 2027.

With this kind of tar­get, surely the num­ber of Malaysian em­ploy­ees in Pro­ton will dou­ble.

GEELY will pro­vide ac­cess to its ar­ray of “green” tech­nol­ogy.

We as­pire to pro­duce en­er­gy­ef­fi­cient ve­hi­cles as this is the way for­ward glob­ally. To have this tech­nol­ogy im­me­di­ately avail­able for Pro­ton is hugely pos­i­tive.

PRO­TON Re­search and De­vel­op­ment (R&D) Cen­tre will be recog­nised as one of Geely Group’s Cen­tre of Ex­cel­lence.

This is def­i­nitely a good deal not only for Pro­ton, but for the coun­try.

This means that our engi­neers will work along­side the best tal­ents in the world and can be ex­ported to any of Geely’s fa­cil­i­ties world­wide.


As for de­sign stu­dios, Geely has four cen­tres — Shang­hai, Gothen­burg, Barcelona and Cal­i­for­nia. Again, Pro­ton auto de­sign­ers may be able to tap the wide ar­ray of advanced ar­chi­tec­ture, thereby in­creas­ing in­di­vid­u­als’ ex­per­tise as well.

Geely also has 16 man­u­fac­tur­ing plants all over the world, and five R&D plants in ad­di­tion to the four de­sign stu­dios. Their love for R&D and tech­nol­ogy means that Geely has thou­sands of lo­cal and in­ter­na­tional engi­neers un­der their pay­roll.

PRO­TON will be­come the Right­Hand Drive (RHD) Man­u­fac­tur­ing hub for Geely-branded cars.

In China, Geely cars are left­hand drive. For Geely cars to en­ter mar­kets that are RHD (out­side Malaysia), Pro­ton man­u­fac­tur­ing plants will be used for the con­ver­sion and for pro­duc­tion.

PRO­TON Tan­jung Malim plant will as­sem­ble Volvo cars.

This is a boon to Pro­ton, for sure. Con­sumers will then have higher con­fi­dence that if a Volvo car can come out from our plants, this means that Pro­ton cars are also of a high qual­ity. On top of this, we earn as­sem­bly fees to­gether with Geely.

GEELY has proven suc­cess in the turn­around of auto com­pa­nies.

The abil­ity to be suc­cess­ful in a turn­around is a key ele­ment of our eval­u­a­tion of FSPs. Cer­tainly, we are im­pressed with Geely’s cre­den­tials. Their bold­ness in ac­quir­ing busi­nesses across the globe is a study of busi­ness acu­men in it­self; it is easy to for­get that Geely is a young car­maker, hav­ing en­tered the au­to­mo­tive in­dus­try only in 1987. Yet to­day, they own 100 per cent of Volvo Cars, the en­tire stake of The Lon­don Taxi Com­pany and make more than one­mil­lion cars glob­ally.

When Geely ac­quired Volvo Cars in 2010, not many gave them a chance with turn­ing the for­tunes of the Swedish car­maker. Yet, they ploughed in RM45 bil­lion into Volvo Cars, and last year, the com­pany recorded its best fi­nan­cial per­for­mance since its in­cep­tion in 1927. They have also man­aged to turn around the fi­nan­cial for­tunes of The Lon­don Taxi Com­pany, which Geely fully ac­quired as a com­pany un­der re­ceiver­ship in 2013. It turned in an op­er­at­ing in­come of RM8.4 mil­lion in 2015, re­vers­ing an op­er­at­ing loss of RM10 mil­lion two years ear­lier.

In March this year, they an­nounced an in­vest­ment of RM1.65 bil­lion to de­velop elec­tric ver­sions of the iconic Lon­don Black Cabs to meet the city’s green re­form ini­tia­tives.

Cer­tainly, Geely isn’t just an­other in­vestor in Pro­ton. They have proven to be a com­mit­ted part­ner in all its ven­tures, help­ing each of the com­pa­nies turn around with ap­pro­pri­ate lev­els of fi­nan­cial in­vest­ment, and a heavy dose of in­jec­tion of tech­nol­ogy and in­no­va­tion.

LO­CAL ven­dors will have the op­por­tu­nity to spread their wings glob­ally.

Part of the deal we agreed with Geely is to al­low our lo­cal ven­dors op­por­tu­ni­ties to of­fer their ser­vices to Geely Group glob­ally. If our lo­cal ven­dors meet Geely’s stan­dards, they will be put in the list of Global Sourc­ing Pur­chas­ing Sys­tem.

This means that if Volvo in Swe­den wishes to source com­po­nents pro­duc­ers, our lo­cal ven­dors will have a chance to be se­lected to man­u­fac­ture au­to­mo­tive com­po­nents for Volvo.

When Pro­ton flour­ishes, we want our lo­cal ven­dors to ben­e­fit too.

GEELY is bold and ca­pa­ble. Ear­lier this month, Geely ac­quired 25.7 per cent of Den­mark’s Saxo Bank, a lead­ing Fin­Tech bank, which was set up in 1992. Geely be­lieves in dig­i­tal tech­nol­ogy and we like the pro­gres­sive­ness in their think­ing. Q: With this deal, how do you see Pro­ton in the fu­ture?

A: We be­lieve DRB-Hi­com can­not get a bet­ter part­ner than Geely. Pro­ton will ben­e­fit from be­ing part of the Geely group, a global busi­ness group that has shown bold­ness and ca­pa­bil­ity that has al­lowed them to reach global rev­enue of some US$30 bil­lion and be­come a For­tune 500 com­pany in 30 short years.

As a state-owned busi­ness pre­vi­ously, Pro­ton had lim­i­ta­tions. As a re­sult, its com­peti­tors over­took Pro­ton.

In to­day’s global econ­omy, an au­to­mo­tive al­liance is a nor­mal prac­tice. Tata Group from In­dia owns Jaguar and Land Rover whilst Re­nault, Nis­san and Mit­subishi are in one big al­liance.

Pro­ton is now a pri­vate com­pany with a global al­liance. This means it has a fair chance of mak­ing a come­back in Malaysia, and en­larg­ing its foot­print glob­ally be­gin­ning with Asean. It will ben­e­fit from the economies of scale that is gen­er­ated by be­ing part of an au­to­mo­tive group, which will hope­fully see it start to turn its fi­nan­cial for­tunes around.

One day in the not too dis­tant fu­ture, Pro­ton will be a brand that Malaysians will once again be proud to call one of their own.

Aerial view of the Pro­ton car as­sem­bly plant in Pro­ton City, Tan­jung Malim, Perak. FILE PIC


Vis­i­tors look­ing at the sec­ond-gen­er­a­tion Pro­ton Per­sona at the Se­tia City Con­ven­tion Cen­tre last year.

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