It’s time for professionalism to drive Proton

  • Business
  • Saturday, 30 Apr 2016

MY 91-year-old father still keeps his Proton Iswara Sedan 1.5. It is over 18 years old and still runs perfectly. No, it doesn’t have a window problem.

He is enormously proud of the national car. None of us wants to use this old car because it runs on manual gear.

His grand-daughter now uses the car to ferry hardware equipment because the old horse, as we call it, is really sturdy.

Langkawi-born Wong Soon Cheong, who speaks impeccable northern Malay (language), will never let any of us sell his Proton. That’s national pride for you.

Like many Malaysians of his generation, they were among the first to crowd the Proton showrooms to place their bookings.

The company’s share of the domestic automotive market hit a peak of 74% in 1993, but now hovers at 15%.

I remember joining my excited dad to place the booking and Malaysians actually had to wait patiently for their cars to be delivered. But that is not the case anymore.

Even Cabinet Ministers have stopped using the Proton – that’s how bad a knock the national car has taken.

The national car was taken private in 2012 to facilitate its turnaround, but is still struggling with the baggage of the past. It is clear that Proton is in this position because of these legacy issues.

The question we have to grapple with is this – is Proton worth saving or should the current owner just close shop, cut losses and walk away?

I like to think many Malaysians still want to see the national car project continue and they take great pride in it. However, they also want a good deal when they buy the brand.

Proton needs to make some hard decisions if it wants to make an impactful and effective turnaround. It cannot afford to repeat the many bad decisions of the past.

The product lines were far too many in the past with different platforms. Proton incurred huge expenses to create brands that were dropped later. It includes the likes of Juara, Tiara, Arena, Inspira, Satria, Waja, Wira and Putra.

Two, the image problems were not well addressed. The power window issue remains in the minds of its buyers even though it has been rectified.

Three, Proton’s vendor eco-system needs consolidation. Whether we like it or not, the present system is not a viable business model. The result is that the Government needs to pump RM1.5bil into Proton.

There were also missed opportunities that have cost Proton dearly. Scale is the game in the automotive industry.

A tie-up with Volkswagen could have saved Proton but as we know it, Proton was a government-linked company then and the proposal for the tie-up was rejected by politicians and not by the professionals.

Like it or not, former Prime Minister Tun Dr Mahathir Mohamad must be accountable for that decision. He treated Proton like a personal property and with his larger-than-life figure, few dared to challenge his decisions. Even those appointed by him to drive Proton hardly questioned the commercial viability of his decisions.

In an interview recently, he said VW wanted 51% equity and that he did not want to see Proton go to foreign hands.

That decision has, however, cost Malaysia a bomb. Not only has good money been lost but we also lost the opportunity to gain economies of scale and turn Proton into a profitable venture.

Since 1983, when Proton was set up, the Government has provided grants and various assistance to the national car company to the tune of RM13.9bil. It is a staggering amount.

It is still mindboggling to many as to why Proton, which was still struggling to make its impact, made the decision to buy the niche British car manufacturer Lotus in 1996.

There was no sharing of platforms and Proton and Lotus were hardly compatible – one was a mass product vehicle and the other, a James Bond-type car.

Was it again another decision based on irrational nationalistic pride? A Malaysian company taking over a British company? Another Malaysia Boleh move that captivated Malaysia in that era?

The acquisition diverted the management’s attention from the main income churner, which is supposed to be Proton.

There is more. The much-touted Proton City in Tanjung Malim seems to suggest that it was a politically-driven decision and not a well-thought out one.

Why is there a need for two plants when Proton is suffering from under-utilisation?

It was also not simply a case of plucking the workers from Shah Alam and transporting them to Tanjung Malim.

Proton’s job was and is still making cars and selling cars. Building a township to meet the requirements of the staff is surely not the business of Proton.

Fast forward to 2016 – enough bad decisions have been made and it is now time to clean up the act, so to speak.

Let the professionals run Proton as it ought to be, more so when it is already privately-owned. Get on with the job of teaming up with strategic foreign partners – that was clearly stated in the National Automotive Policy in 2009.

Let’s not allow foolish pride to get in the way. Perodua’s manufacturing arm may just be 49% Malaysian-owned and the majority owned by Daihatsu and Toyota. But at least it is profitable.

What is the point of being wholly-owned by Malaysians and it is bleeding profusely?

It is time to let the Proton management take over the driver’s seat. Enough is enough.

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