When I first comment on this issue on 17th July 2006. I do not aware of any plan by any entrepreneur attempted to acquire Proton.
Latest issue of The Edge reported that two recent proposals to "rescue" the national car company has been received by government.
The first was submitted by the Naza Group last year and recently, DRB-Hicom Bhd submitted a second proposal. And there is another proposals submitted by Sime Darby last year. The Edge reported that Sime Darby CEO Ahmad Zubir Murshid admitted that a proposal was submitted to the government "a long time ago".
Sime Darby, however, is a Government Link Company (GLC)...not entrepreneurs driven company. Sime Darby is a dealer and assembler of Ford in Malaysia, like Hyundai in South Korea before joint venture with Mitsubishi Motor.
DRB-Hicom, control by Tan Sri Syed Mokhtar in mid-2005 show a floundering performance, stated Leela Barrock, a journalist with The Edge. "These are just not car people," says an analyst. DRB itself may have had some history in automotive industry but Syed Mokhtar does not, write Leela Barrock. Having said that, it must be noted that DRB itself is a company that need saving. More interestingly, in its automotive segment, DRB actually posted loss of RM12.27million for 1QFY2007, compare to a profit of RM28.35 million in previous corresponding period.
PaulTan.org : Naza, DRB-Hicom to buy Proton?
南洋商报: 多元重工业纳莎建议购普腾股权 赛莫达再斗纳西慕汀
Business Times : Proton firms on talk of stake tussle
In another commentary: "Should entrepreneurs get Proton?". The Edge's Leela Barrock analyze the two Tan Sri. The she write: Nasimuddin has his Korea Kia connections, which could be used to roll out vast numbers of Korean lookalikes with Korean technology-no, not an exciting prospect for the poor Malaysian driver who would be "graduating" from a Proton to a Kia.
Later, she stated it was Mahathir who want Proton to start spawning more models against advise that a car company needs critical economies of scale. The late Tan Sri Yahaya Ahmad agreed to fulfill Mahathir's dream of multiple Protons and thus was rewarded with the national car company in the late 1990s.
He blame the late Yahaya acquired British car company without board approval, launch Tiara, a badly received car with an ancient Citroen engine. Systems and processes that are required for the healthy management of a company were done away with to fan the fires of entrepreneurial zeal.. And it was Yahaya who turned the screws on parts suppliers, which may have led to an erosion of quality.
The conclusion, she stated that entrepreneurial fervour has not worked for Proton.....against what I have suggested.
Actually, Yahaya was rewarded with a Bank (Eon Bank), a transport company (Intra-Kota) lead to group become too diversified. I find Syed Mokhtar group has some similarity with the empire of late Yahaya. Thus,, causing recent loss of DRB-Hicom Bhd. And there is a deal between the government (Mahathir) and entrepreneur (Late Yahaya) like Tajuddin Ramli, causing the failure.
Naza, however, is more focus than the above two. Although Nasimuddin have other non-automotive business like hotel and taxi company.
At the moment, there is only a few automotive company in the world run by government. Any successful one?
星洲日報: 分析員：售股權給納莎和多元資源無助解決普騰問題
Update:No proposals to buy Proton stake
TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse
4 comments:
I guess the only successful government owned car company in the World is Maruti-Suzuki in India. It is the largest car manufacturer there.
Really, this is first time I heard such a name. Apparently, this is a joint venture company with Suzuki group.
In terms of marketing, Proton (and Perodua) is making stronger presense in UK. www.parkers.co.uk has done some review and Proton Savvy gets 4 stars rating, probably due to it's strong structure. Proton is making presense in Singapore, Indonesia, Saudi, Australia, Thailand and planning to extend to China, India and Iran.
In terms of product, besides Satris Neo and Savvy, Proton tied up with Mitsubishi to design 2 new models and plan to release by mid-2007. There were also talks with Chery and Peugeot Citroen for more partnership but no details are reported.
In terms of manufacturing, Proton is controlling sales and production so that inventory of cars did not exceed two months production. Proton has plants in Malaysia and Indonesia.
At this point of time, Proton doesn't seems to have a strategy to revent itself as a global automobile maker. Her main intention is simply to increase sales and turns the report card from red to blue.
Proton might take another year or two to achieve that as she needs to increase sales by 100k units. Furthermore, profit margin might reduce in coming years when competition gets stiffer.
I am grateful that Azlan is making progress and giving good focus on the issues.
To be fair, Tan Sri S.M. Nasimuddin Amin do not have track record of break up any company. In fact, he has the track record of growing Naza from a small AP company into a multi-million company. Which very few bumiputra in the country have such record until today.
Last week, Maybank Securities issue a report on Automotive Industries
stating that "national segment of Commercial vehicle saw a sharp increase of 72.6%. We believe this is due to strong sales in national multi-purpose vehicles (MPV), especially by Naza-Kia which launched a very aggressive promotional drive in July 2006..........Compared with July 2006, TIV increased 7.4% to 47,189 units in August 2006. The higher month-on-month (m-o-m) volume was mainly due to higher national commercial vehicle sales, which rose a drastic 130.4%. This is again likely caused by the aggressive promotion by Naza-Kia on their MPVs."
Previously, Naza grow has threaten Proton's sales and this cause Tengku Mahalee, CEO of Proton at that point of time to complaint it to Proton's adviser Ex-Prime Miniter Tun Dr Mahathir. Mahathir then create the controversial National Car Status issue.
This is the different between an employee of GLC and enterpreneur.An employee of GLC complaint and seek government intervention whereas enterpreneur find ways to grow their company.
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