Proton wants RM3bil to develop new models

Proton Tanjung Malim Plant

Some salient points gleaned from the article below:

• seeking up to RM3bil in development funding from the Government and Petroliam Nasional Bhd (Petronas).

Excise duties amount to about RM7bil if I'm not mistaken. Which is to say, to protect the local auto industry, consumers had to pay RM7bil. Proton itself, needs a little less than half that amount just to develop new models. I would like to ask the management of Proton, how much returns would they be able to get from that RM3bil fund? How many cars would they need to sell?

You can forget about all those billions already given. Count yourselves lucky if they don't ask for more later.

• not sure if Proton’s turnaround plan, which has an ambitious target of selling 350,000 cars by 2018, would have been carried out effectively

What turnaround plan? How many of these plans have they came up with all these years? The fact is, turning around is not possible after so many attempts. Every time Proton wants money, they come up with a turnaround plan. We've heard it all before.

• turmoil in management and the friction within the top management of Proton. 

All of them are just in it for the ride, enjoying the perks and big paycheck. Everyone knows Proton pays well.

• Proton deputy CEO Lukman quit his job a few weeks ago – the second time he has resigned.... Lukman was a tough boss and employees had difficulty adjusting to his demands....

This has to take the cake. This is the first time I've heard that the boss that has to resign when it is the employees that can't perform! What kind of company is that? And you want RM3bil so that they can keep their jobs?

• could find it tough to maintain its 2013 market share of 21%

Perodua has been maintaining a market share of 30%. Proton's market share is declining.

Malaysia's automotive industry has got to be the most screwed-up in the world. Creating Proton is one of the greatest mistake in this country's history. The people are still paying through their noses for this mistake, for 3 generations already!

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Up to RM3bil needed to develop new models

Wednesday March 5, 2014 MYT 12:00:00 AM

PETALING JAYA: Proton Holdings Bhd is seeking up to RM3bil in development funding from the Government and Petroliam Nasional Bhd (Petronas).

However, the national car manufacturer – which has appointed Datuk Abdul Harith Abdullah as acting chief executive officer (CEO) to replace Datuk Lukman Ibrahim – has not been successful with its efforts thus far.

“The International Trade and Industry Ministry (Miti) and Petronas have both declined to assist in the funding,” said a source.

Now a unit of DRB-Hicom Bhd, Proton has been seeking fresh funding to execute its transformation plan that will see new models being developed, including an electric car.

The national carmaker had first approached Miti last year for funding, but its request was turned down. The reason was that it couldn’t fully justify why it needed such funding from the Government.

It later approached Petronas, but that attempt has been futile too.

Coincidentally, the futile attempts by Proton to secure funding come at a time when the position of former prime minister Tun Dr Mahathir Mohamad as Petronas adviser is a talking point.

On Dec 2 last year, Dr Mahathir had announced that he was quitting as adviser to Petronas. Subsequently, Prime Minister Datuk Seri Najib Razak urged him to reconsider his decision.

Petronas president and CEO Tan Sri Shamsul Azhar Abbas has declined to answer queries on the position of Dr Mahathir in the national oil corporation.

“Ask the Prime Minister. It’s the Prime Minister who appointed him,” said Shamsul in reply to a question.

It has been reported that Proton has committed RM3.8bil in investments until 2017 and needs more capital to be competitive and achieve its turnaround plan. Perusahaan Otomobil Kedua Sdn Bhd (Perodua), meanwhile, has committed RM1.8bil until 2015.

Industry executives are puzzled as to why Proton deputy CEO Lukman quit his job a few weeks ago – the second time he has resigned.

The first was in July last year, but he was persuaded to return after a few months.

It came as a surprise back then, but auto executives are not surprised he has finally decided to call it a day at Proton. Word is that Lukman was a tough boss and employees had difficulty adjusting to his demands.

Auto executives are not sure if Proton’s turnaround plan, which has an ambitious target of selling 350,000 cars by 2018, would have been carried out effectively, given the turmoil in management and the friction within the top management of Proton.

“The plan is good and Proton has a real chance of pulling it off,” said one observer after Lukman left the company.

Proton is set to launch its global small car by June this year, but its financial performance in the latest quarter has cast some doubt on its prospects to compete with the liberalisation of the industry set to intensify under the latest National Automotive Policy.

Sales slumped by nearly 30% between end-September and December 2013 from its second quarter, and likewise, its market share. Proton had a good second quarter following the launch of the Saga SV, but could not maintain the sales stamina.

“It’s a challenging landscape and it can only get tougher and not easier,” said one auto analyst, describing the task ahead for Proton.

While Proton has its share of competitive issues, rival Perodua seems to be holding steady.

Perodua’s market share stood at 30% last year, and with sales projections expected to be flat in 2014 in an industry slated to see only a meagre increase in total industry volume, Perodua should maintain its iron grip on market share.

Proton, on the other hand, said analysts, could find it tough to maintain its 2013 market share of 21%. - SOURCE