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
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
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.