The Proton Dilemma

PM Orders Proton To Turn Around, Seek Other Equity Partners
KUALA LUMPUR, May 31 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi has directed Proton Holdings Bhd to start turning around its financial performance after its losses deepened to about RM619 million and Volkswagen AG backed out from becoming an equity partner.
"They have to turn around. They cannot be going on making losses," he told a news conference after chairing an Umno Supreme Council meeting here today.
Asked whether Proton would need top management changes, Abdullah said: "They have to do whatever they think is necessary."
Proton incurred a full-year pre-tax loss of RM619.9 million for the year ended March 31, reflecting the challenging operating environment.
It registered a pre-tax loss of RM11.8 million on the back of a turnover of RM1.27 billion in its fourth quarter.
On a foreign partner for the national car maker, Abdullah said Volkswagen AG was not keen on Proton's proposal in terms of equity participation, but would rather engage in some other form of cooperation with Proton.
In view of this, Abdullah said, Proton needs to initiate talks with other parties for a strategic tie-up.
"I have decided, since Volkswagen is not interested in the proposal that Proton wants in terms of equity, Proton needs to talk to other people," he said.
The government has missed its self-imposed March 31 deadline to name the strategic partner for Proton.
Khazanah Nasional Bhd, the Malaysian government investment arm, owns around 43 percent of Proton.
It was widely reported that Proton had engaged in talks with several foreign carmakers, including Volkswagen and General Motors Corporation.

Proton In Dire Need Of Technical Partner

KUALA LUMPUR, May 31 (Bernama) -- Proton Holdings Bhd is in dire need of a good partner which will provide it the technical expertise it requires to improve its quality, sales and compete in the international market, says an analyst.
"They are also lagging behind in marketing their products compared with their peers," the analyst, from a local stockbroking firm, told Bernama, today.
Getting a good partner is therefore important for them in the long term, said the analyst who spoke on the condition of anonymity.
"Competitiveness is very important for all car manufacturers in both the domestic and international market.
"Proton will also have to meet the quality, an important aspect in fulfilling a marketing strategy. This will help them gain confidence from buyers."
She said that Proton should also produce a volume selling car that will help them improve their sales.
"If Proton fulfills all these factors, they will be able to return to the black in the future," she added.
For the financial year ended March 31, 2007, Proton recorded a pre-tax loss of RM619.9 million.
Its managing director, Datuk Syed Zainal Abidin Syed Mohamed Tahir, attributed the poor performance to lower sales volume and a combination of other factors including one-off expenses.


tunku : it's very easy to answer like what pm had answered, "They have to turn around. They cannot be going on making losses,","They have to do whatever they think is necessary."Anybody can answer like that.Pak Lah should make proton one of his top agenda as there are more than 20000 people working with proton.change the management.the current management is too slow to move.it's shocking to see once cash rich company now losing almost everything it has.proton is our nation pride.as for strategic partner, i guess now a local company will do as there is not much time for proton to keep breathing.may be a consortium like company comes in. the consortium can be run jointly by DRB Hicom,Naza and any other parties which has technical/marketing experience in automative industry. it will be a win win situation for all.look a the new proton model which will be launch soon,BUY IT, help proton.