Defintely a must for proton to seek help from a bigger partner - happy cos this time it's non jap..

proton neo gti with DSG tranny anyone?

Govt okays 51% sale of Proton manufacturing

http://www.theedgedaily.com/cms/content.js...0b6400-37046e77



The government is believed to have finally decided on giving foreign parties 51% control in the manufacturing operations of Proton Holdings Bhd, with German carmaker Volkswagen AG being mentioned as a potential partner, a source said.

The source said negotiations have resumed with Volkswagen AG as of last month for it to come into the picture. Proton and the German carmaker ended talks early this year after they failed to agree on issues such as control of the company.

According to the source, the government is agreeable to a model that would be similar to the arrangement between second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and its principal Daihatsu Motor Co Ltd of Japan.

Under this arrangement, the domestic distribution arm will remain in Proton's domain but the manufacturing arm will be headed by the foreign partner, which will bring in technical expertise and help expand Proton's production for export.


It is learnt that the government reached its decision in mid-October during a closed-door meeting on the automotive industry chaired by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

The meeting was attended by several ministers and representatives from the Economic Planning Unit and Bank Negara Malaysia.

Shortly after that, two senior officials from Volkswagen AG met up with Second Finance Minister Tan Sri Nor Mohamed Yakcop in Putrajaya to look into the matter. At the top of the agenda during the discussion were the equity structure, the vendor system and product development.

Volkswagen AG is expected to come back with a complete proposal regarding its participation in Proton, the source said.

The government's latest stance has opened up more space for renegotiation with Volkswagen, or any other foreign carmakers, to become Proton's partner.

"The latest development is critical to remove the current deadlock in the local automotive industry. Parts and component makers that supply to Proton have been suffering because of Proton's declining production volume. You cannot solve the industry problems unless you solve Proton's problem," said a source.

It is learnt that Proton has halved its production volume to about 5,000 units a month for November and December given its huge stockpiles of unsold inventories that have to be cleared by year-end.

Lower production from Proton means fewer jobs for its parts and components suppliers.

"The slower the government acts on it, the more serious the problems could become. The vendors industry cannot wait further and they need a workable solution for Proton," said the source.

He said the industry is getting impatient with the numerous memorandums of understanding (MOUs) that Proton has signed in recent months with French carmaker PSA Peugeot Citroen, Mitsubishi Motors Corp, Chery Automobile and others.

"Pending finalisation, the scope of the potential collaborations under the MOUs does not offer a complete solution to Proton's problem in the longer term," he added.

HLG Research, in a recent report on Proton, said: "The preferred, and in our opinion the choice option, is foreign equity participation with management control at Proton Holdings level. This enables the foreign party to steer and drive the necessary changes to improve Proton's uncertain outlook."

However, given the potential political backlash of giving Proton's control in whole to a foreign partner, a Perodua model is a more sensible option for the government to be agreeable to.

With the government having made up its mind, it is now up to Khazanah Nasional Bhd to decide whether to sell its majority stake in Proton to private sector enterprises, such as Sime Darby Bhd or DRB-Hicom Bhd, to drive further negotiation with their respective foreign partners.

On Nov 8, Proton's share price soared more than 11% or 54 sen to RM5.20 with 2.2 million shares done after talk resurfaced of a possible takeover of the national carmaker by the government or the entry of a new shareholder.

Meanwhile, speculation is rife that former Perodua managing director Tan Sri Abdul Rahman Omar will be appointed as Proton's chairman to replace Datuk Mohd Azlan Hashim. When contacted, Abdul Rahman said he was unaware of such an appointment.

This post has been edited by hypermount: Jun 4 2007, 11:35 PM

Don't be too excited yet. There are too many empty cheques and promises given by Proton before and it is hardly for us to believe them anymore. But if Proton really can give 51% of foreign party control to Volkswagen as the potential partner in the manufacturing operations, I doubt Volkswagen will really do technology transfer such as their very state of the art DSG or super-turbo charger to us. I believe maybe they are just interested with Proton's manufacturing factory at Tanjung Malim in order for them to set up their base to assembly and export cars to South East and Asia countries.

Anyway, looking forward some good news from Proton. I don't expect Proton cars to fully packed with Germany technology but at least please give us some camshaft profiling or Vvt-I alike technogies. I don't mind to buy Proton car in future if their car is reliable,having low fuel consumption and highly rated safety. No more Tin Nipis Proton.

I hope Malaysia Boleh, Proton Boleh too.

hmmm....OT, but another method for TDM to bite Pak Lah's ass again?

Looks like some ppl have finally relooked at wat their ego caused last time.

Anyway, with a foreign partner like VW, at least I feel more assured that Proton QC will b improved and 'fresher' technologies will be injected.

well, IMO, no matter how influential a JV partner is, there's no such need for giving out the number of share which will eventually lose out in the end, rite?

with 51% stake on hand, they can practically do anything they wan which might not be advantageous to us...

on the other hand, Proton quality and other matters may be resolved and improve with such a move.

cheers.

if Volkswagen to hold 51%, means they can send in their selected CEO ?

That's just their manufacturing operations, not the entire Proton. Just like Perodua now, where their manufacturing process is 51% owned by Daihatsu.

cool......any new line ups....? something like VW Gti...??

Not sure whether this is true or not, as we've got so used to empty promises already. The last time VW-Proton tried to cooperate, the deal went dead. And now it's resurrected.

The cooperation would probably mean better cars for us, as VW has successfully turned fortunes around with Skoda and Audi. Proton cars may slowly metamorphose into VW-lookalikes, but that will only be a good thing.

Finally, Proton Golf GTi... Meh... VW would probably use Proton's factory to roll out models for SEA region. Meaning we might have sub-100K Golfs

I just hope that things get better from here on...

When the Proton guys can't handle the situation, better give it to outsiders to solve it rather than sink the whole boat.
This report confirms that Proton is in big trouble.

Don't hope for technology transfers. Even with Lotus tech. Proton still doesn't makes any benefits. Teh latest Proton Savvy is a joke in UK. Lotus or no lotus, proton still remains very Malaysian. Time for a change.

then Proton will rebadges VW cars, like what Perodua did?

The Lotus+Proton tie is different from this WW+Proton Tie.

Proton Controls Lotus. There were some technology transfer but the whole process and management was by Proton. Proton didn't know how to really make use of Lotus' technology and mainly only used the name Lotus as a marketing strategy.

WW rejected Proton the last time because the Government wanted to sell 51% of Proton Share to them With the condition that Proton will still be under full management of Malaysians. Now, if you were WW, how would you feel spending money pumping and buying 51% of a company but having no control over it?

I guess that the talks did go on and now the Government has decided to actually give WW some management control when they buy over 51% of Proton.

I certainly want to see them become a better company and make better cars.

This post has been edited by n305er: Nov 9 2006, 10:06 AM

Well... just a possible takeover, it is not done yet. It might end up again like the previous deal.

i doubt that VW wants to control the entire proton, they are aiming for protons tanjung malim assembly plant; it's one of the most well equiped plant in southeast asia, VW can save a lot with assembly cars there instead of buidling one themselves.

may be proton offer them a very good deal over the plant there and may be along with the sales network proton make up so far

yep...VW want to penetrate SEA market

Well, its indeed good news to see a foreign party buying over the majority of shares in Proton... Lets hope for better quality cars from them in the near future!

If you ask me, there will be no changes or VW will give up eventually. If they have a say in manafacturing, i would say 90% of the floor staff will be out of jobs. The staff have absolutely no sense of responsibility or belonging to produce good work, 'it doesn't fit? hantam saja lah proton memang macam ini'. I've been to tanjung malim to visit the factory. BUT since proton prides itself on being a job provider it will not let that happen meaning everything stays the same.
If you ask me i think one section of the factory will be VW with their staff and the rest Proton can do whatever they want with it.

Proton is a sinking ship. The people on top know that, and they're panicking.

With production halved to 5000 units/month, can you imagine what the downstream supply line is doing? Hardly anything. Manufacturing-wise, it's a bit no-no to slow or stop the production line. There should be accurate enough projections and targets to ensure that once started, the line will not stop. Anything other that 100% means that Proton is losing more money on the line, and that they've either messed up the projections, or are losing their confidence in their ability to sell. Unfortunately it has gotten to the point where cars aren't moving fast enough, because customers are losing confidence in quality, and because of all this uncertainty about the car industry, and the entrance and development of other players in the price range, offering better cars for the same money. If Proton goes down, it'll take a heck of a lot of related industries with it.

Now, they've tried. They've put out new models, they've done new marketing campaigns. Unfortunately they're still selling a two-decade old chassis, and they're running out of ideas. Now, VW has experience, expertise and more than a little clout. I'd reckon letting them run the show, and have the Proton people take an ego blow, is better than letting Proton sink. Cos if this continues, Proton will flounder eventually, and it'll drag the entire economy down with it.

Of course, one wouldn't know what VW's true agenda with Proton is. Obviously it's to make money, but whether there's anything in there that'll adversely affect us here in Malaysia, it's impossible to tell. Fact is, Proton is stuck between a rock and a hard place, and something drastic has to happen.

This post has been edited by j05h: Nov 9 2006, 11:34 AM