WHY CRY OVER SALE OF PRO­TON STAKE TO GEELY?

On the con­trary, the deal will re­vive for­tunes of the Malaysian car­maker, as has hap­pened to Volvo

New Straits Times - - News -

SOME peo­ple do have se­lec­tive mem­ory. When he was the chair­man of Pro­ton, Tun Dr Ma­hathir Mo­hamad trav­elled to China to meet Chi­nese car­maker Zhe­jiang Geely Hold­ing Group to seek a part­ner­ship with Pro­ton.

And last week, the for­mer pre­mier made a big fuss over the loss of his so-called “child” fol­low­ing the sale of a 49.9 per cent stake in Pro­ton to Geely.

It was Dr Ma­hathir and Tan Sri Syed Mokhtar Al-Bukhary, who owns the DRB-Hi­com group that bought Pro­ton in 2012, who went to China in 2014 to forge a Pro­ton part­ner­ship with Geely. Their bid fell through.

Not un­ex­pect­edly, Dr Ma­hathir has re­acted an­grily to the news of the stake sale.

“I am a sissy. I cry even if Malaysians are dry-eyed. My child is lost. And soon my coun­try. Please ex­cuse me,” he wrote on Thurs­day.

With due re­spect, Sir, Pro­ton is our child. But this child must learn to grow up and face the harsh re­al­i­ties of the global auto in­dus­try, where merg­ers and ac­qui­si­tions are a norm.

Why cry, when we should in­stead re­joice that the fu­ture of Pro­ton looks more se­cure than be­fore.

The era of the over-pro­tected do­mes­tic car in­dus­try and the over-de­pen­dency on the small­ish do­mes­tic mar­ket is long gone.

Take the ex­am­ple of Volvo. Un­der Geely, the Swedish car­maker is back in profit and sell­ing well in China and the United States.

Geely’s pur­chase of Volvo from Ford in 2010 was, at the time, one of the most high-pro­file takeovers by cor­po­rate China and it still serves as a test case for Bei­jing’s in­dus­trial am­bi­tions as well as its fi­nan­cial power, UK’s

said.

Volvo’s busi­ness has re­bounded af­ter a se­ries of bold moves in both Swe­den and China, it said.

Its profit mar­gins are cur­rently within touch­ing dis­tance of those of the big three Ger­man brands — Audi, BMW and Mercedes, the UK pa­per said.

Last year, Volvo sold 82,000 cars in China, its big­gest sin­gle mar­ket. This com­pares with its sale of about 70,000 in its home coun­try Swe­den.

Dr Ma­hathir may be sen­ti­men­tal about his “baby” but the stark busi­ness re­al­i­ties tell us that Pro­ton has to have its economies of scale, bet­ter tech­nol­ogy knowhow and a deep pocket in or­der to

The Pro­ton plant in Tan­jung Malim. The na­tional car­maker is em­bark­ing on a new and more ex­cit­ing jour­ney with Geely open­ing up doors in China and else­where.

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