07 December 2010

Proton loves Perodua to avoid extinction?

There has been a longstanding issue which has to be solved in Malaysia automobile industry – demise of Proton. The national car manufacturer had before storming the local car industry with its popular models such as Wira and Waja. While Proton was unbeatable during that time, Perodua (national 2nd car manufacturer) had approached Proton for a merger, but was turned down.

Now, the whole table turned the opposite direction, with Proton begging for a merger with Perodua. Why Proton so desperate right now?

  1. Proton was over-taken as the #1 in Malaysia
  2. Proton is running with an half-empty plant
  3. Proton must address its problem as soon as possible
Why Perodua then?

In fact, Proton had identified two main areas where they have to improve on – technology and scale. To address it, Proton chose the technology path because it was the national icon, and only technology expertise could transform the company for the long-run independently.

First, Proton approaches Volkswagen, then General Motors, then Volkswagen again. But, all was failed because of the integrity of Malaysia as Proton was the icon, as the foreign partners reportedly keen to be the ultimate decision-maker.

So, scale was the last path for Proton. With the poor sales volume and unpopular new models in this highly competitive market, Proton had a difficult way to go the extra miles without an angel. Meanwhile, Perodua with popular models like Myvi and Elza, facing the needs to expand its plant to cope with the demands. As such, Proton which has the excess capacity in its Tanjung Malim plant could perfectly address Perodua's good problem.

Moreover, Proton can clinch back their #1 the fastest way by merging with Perodua, thus eliminate their main competitor. Perodua also has the more advance technology expertise since they collaborate with Daihatsu, a Toyota-controlled manufacturer, which explains why the quality and performance is better than Proton's.

The above gave Proton reasons to launch a "forced marriage" with Perodua. Malaysians would have to continue subsidizing the profit of Proton and paying more for non-national cars for the survival of Proton. We had had enough all these years. Let's give Malaysians lower car prices and forget the prized Proton.

We are happy for having Perodua, not Proton. The forced marriage would not make babies (bear fruits), and Malaysians will continue suffers with expensive, yet poor quality cars. Think about our babies (next generation), instead of Proton's.

Finance Malaysia was being told that Myvi is faster than other cars…

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