Last Saturday, The Star's Bizweek reported that industry sources say that US-based auto giant General Motors Corp may be interested to take up to 35% of equity in Proton Holdings, and may make an offer as early as next week to state controlled investment arm Khazanah Nasional Bhd.
General Motors is among the largest companies in the world in terms of market capitalisation. It has under its belt marques such as Chevrolet, Vauxhall, Opel, Holden, GMC and Pontiac.
“It could be that General Motors may look to Malaysia to be main assembly plant for passenger vehicles while, its operations in Thailand focuses on pick up trucks and commercial vehicles. It could be some form of break down.
“Malaysia is after all the largest passenger car market in Southeast Asia, while Thailand is a haven for pickup trucks and the like,” an industry observer laments.
At present, General Motors has a presence in Thailand, via General Motors (Thailand) Ltd, which operates a manufacturing plant in Rayong, which exports vehicles as well. Among the marques built in Thailand include Chevrolet, Holden, Opel, Subaru and Vauxhall among others. The Chevrolet Zafira is among the models built in Thailand and exported.
Possible alliance with DRB-Hicom
There is speculation that conglomerate DRB Hicom may be partnering General Motors in its venture to take over the helm of Proton Holdings.
Details are however unclear, as officials of DRB Hicom are keeping information close to their chests. It was previously reported that tycoon Syed Mokhtar, who controls 15.8% of DRB Hicom, was looking at taking over Proton Holdings with a foreign strategic partner.
South Korea Experience
The most successful automobile company in South Korea Hyundai aim to chart it own direction in global automobile industry. Although Hyundai dispose off 12% shares to Mitsubishi group in 1979 (Like Proton). Hyundai remain relatively independent on it global market strategy. Similarly, another South Korea automobile company Kia disposed off 20% shares to Ford, Mazda and Itochu but this does not restricted Kia brand strategy in global market.
Pioneer in South Korea automobile industry Daewoo, however, restricted by General Motor global brand strategy. Daewoo, frustrated by General Motor restriction have to buy back shares hold by General Motor in 1992. However, Daewoo have difficulties un catching up Hyundai and Kia in Daewoo. Daewoo take over Ssanyong during Asia financial crisis but become insolvent after one year. General Motor has take over back Daewoo eventually.
looking at experience of Daewoo. General Motor clearly not an ideal partner for Proton unless GM never restrict the country which Proton intend to penetrate.
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