Proton-Geely ops shifting into high gear
Deal mutually rewarding for both firms and can contribute to revival of Malaysian automotive industry
NOW that the definitive agreement has been signed between DRBHICOM and Zhejiang Geely Holding Group Co, the time has come for Proton Holdings Bhd and the Chinese car giant to get down to work to operationalise their mutually rewarding strategic partnership.
With this, the polemics on losing sovereignty, giving up the national identity of the car and selling out to China must stop for they are baseless political allegations aimed at undermining the government’s resolve to save Proton.
What is important now is that there is an economic solution to rescue Proton out of its financial mess created by a business model that was unsustainable in its early years. It would not only bring about good business opportunities for both companies, but contribute to the revival of the Malaysian automotive industry and emergence of indigenous brands, regionally.
The goal for Proton, a subsidiary of DRB-HICOM is clear, i.e. to turn around financially and achieve sustainability with Geely’s technical expertise, penetrate export markets and establish an Asean footprint.
The road ahead for Proton is clear. It must regain its dominance in the domestic market from a mere 12 per cent currently.
Capacity at the Tanjung Malim plant must be maximised by making Malaysia the right handdrive hub for Geely in the region. And, if there is excess capacity, the plant would also be given the opportunity to assemble Volvo cars. Geely wholly owns Volvo, the Swedish carmaker.
More importantly, maximising capacity would generate new employment opportunities that are set to benefit hundreds of thousands of Malaysians.
Without a foreign strategic partnership, the social costs of more Proton workers being unemployed, especially in Tanjung Malim, would have had far-reaching adverse consequences on the domestic economy.
Proton’s Tanjung Malim plant has a capacity to manufacture one million cars annually but only made over 72,000 cars last year with the company reporting a loss of RM1 billion. Such a state of affairs cannot be allowed to continue, which is why the government has been pushing DRBHICOM to look for a suitable partner as part of its criteria in giving a RM1.5 billion soft loan.
Undoubtedly, a major strategy from the partnership would be setting the stage for Proton to become one of the leading carmakers in Southeast Asia and one of Malaysia’s great exports to the region.