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New Proton Perdana A Turning Point For National Carmaker

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PUTRAJAYA – The launch of the new model of the Proton Perdana, an executive sedan by Proton Holdings Bhd (Proton), could prove to be a turning point for the national carmaker, said Prime Minister Datuk Seri Najib Tun Razak.

He said the launch also symbolised the government’s determination to help Proton regain its glory days and put it on track to generating more profit which will benefit the country.

He added Proton could also prove it was a serious player in the automotive industry, and continue to have a major role in the development of local talent, vendors and entrepreneurs.

“I hope the launch of the new model Perdana will be a turning point for Proton, and benefit the national economy and people.

“I am sure the company will continue to innovate and improve, to produce the best cars for Malaysians and customers abroad,” he said at the launch of the fourth generation Proton Perdana here today.

Najib, who is also the Finance Minister, however noted that Proton was not currently in the position it should be, in lacking the right research as
well as development ability, and the production scale required to remain competitive.

“At times, there was a sense of hubris, that Proton could do anything as the government would always back it. Two factories were built (Tanjong Malim and Shah Alam), capable of producing 400,000 units annually.

“But, last year, Proton sold only 102,000 cars,” he said, adding, the company’s share of the domestic automotive market stood around 15 per cent, compared to a peak of 74 per cent in 1993.

Najib said the government had to date provided grants of nearly RM14 billion, various forms of assistance and foregone taxes to Proton, since it was established in 1993.

In April, he said the government approved a soft loan of RM1.5 billion to Proton Holdings, subject to several conditions which must be met by the company.

“This is not a bailout as the loan came with strong conditions. But, the urgent need for the cash injection, laid bare the fact that there are serious structural flaws within Proton,” he added.

Najib said Proton had flourished due to a very high level of government assistance, and the national car industry grew under the umbrella of protectionism with quotas on engine sizes, and Malaysians paying high import duties on foreign cars.

He said with government assistance, Proton must meet stringent standards of professional management to move forward, and ensure it has a model for long-term sustainability, while immediately identifying a strategic foreign partner.

“The loan was not a blank cheque. The company must prove itself, both in the domestic and international markets. Ultimately, Proton must build up a
strong export programme and become less reliant on Malaysian buyers,” he added.

He highlighted that the government wants to see Proton succeed again, and for this reason, the company would be assisted by the newly-formed Special Task Force.

The task force, headed by Pemandu Chief Executive Datuk Seri Idris Jala, will identify the strategic foreign partner, and monitor as well oversee the turnaround process.

“We have learned from Proton’s past, so the task force will not interfere in the day-to-day operations of the company,” he said.

Najib also thanked Proton and its workers for their efforts and contribution to the automotive sector.

“I am sure the company will continue to innovate and improve, to produce the best cars for Malaysians and customers abroad.

“The launch of the new model Proton Perdana today should be the start of a fresh chapter in the company’s history. Proton must deliver cars that meet the requirements of customers,” he said. – BERNAMA

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