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IT’S A GREAT RE-SET FOR PROTON

POSTED BY admin ON 18 June 2015

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By: Yamin Vong

IF it gains confidence with its new partner, Suzuki Motor Corporation, Proton may yet rise to regional prominence with models such as the Suzuki Celerio which is popular in Indonesia.

The Suzuki Dzire or Swift sedan could be the Saga replacement model.

Last Monday, Proton owner DRB-Hicom signed a memorandum of understanding with Suzuki Motor Corporation for collaboration on technology and vehicle platforms.

With most of its treasury consumed by the R&D and manufacturing of the over-engineered Iriz, Proton needed a partner.

Suzuki is a good choice because it is a specialist in making small cars and as we have seen with the Perodua Axia and the predecessor, the Kancil. These are popular people’s car because they are affordable and fuel efficient.
Small they may be but you could squeeze in a family of five. As a family vehicle, it beats the motorcycle.

The MOU inked by DRB-Hicom and Suziki is just a non-binding document. The two signatories have to make it work.

Assuming that the two companis can reach a consensus to share in the broadest form, it could mean a joint venture that would see cars made in Tanjung Malim being exported to Thailand, Myanmar and left-hand drive Vietnam.

What are the chances of that happening?

Necessity is what will make it happen and Proton needs a partner urgently. It needs to follow the cost-efficient path of Perodua which shares technology, platforms and economies of scale with Daihatsu.

Will Proton be able to learn from its unhappy experience with its original partner Mitsubishi Motor Corporation? Will it be able to nurture a harmonious and mutually satisfying relationship such as UMW-Toyota with Daihatsu in the joint-venture Perodua Trading and Perodua Manufacturing?

Yes, definitely this time, Proton knows how to make cars and it has the managers who can absorb the knowledge of how to design and anticipate trends of cars that people want to buy three years from today.

But what about the emotional quotience of its management resources? We have heard enough stories about the superior mien of some Proton managers and their cultural exclusivity.

We give credence to this because in the past, after the Tan Sri Eric Chia and Datuk Gurcharan era when Proton dominated the mass-market market, there were many managers and policy-makers who thought they knew it all. They blew the two opportunities that VW offered.

Proton’s baggage was that it was a government-owned company and protected by tariff and non-tariff barriers. When control was bought by DRB-Hicom, a government-linked company (GLC), Proton was still protected as a national car.

The clumsy efforts of the National Land Public Transport Commission (SPAD) to make the Proton Exora the national taxi backfired. Taxi drivers want to have a choice – Toyota Innova, Nissan NV200 in addition to the Proton Exora, for example – of car because they are the ones who pay for the vehicle and its daily maintenance.

Today, we have two of the automotive industry’s oldest men – Tun Dr Mahathir Mohamad, 92, and Osamu Suzuki, 85, – shaking hands on a proposed deal. We must pray that in their age and maturity that this MOU will lead to a synergistic relationship that will allow Malaysia to make cars for the domestic market and export them to the region.

Suzuki is the market leader in India and the only reason that it don’t export is that India’s domestic demand and economies of scale is enough for it.

Malaysia on the other hand, with a small population of 33 million people, including three million foreigners, needs the regional market of 600 million people.

In today’s global automotive industry, there are few, if any, successful car makers that are of “pure’ nationality. To be truly successful, Proton must discard its “Malaysian Car” identity and be an international car company.

It has already hired two of VW’s senior managers and the way forward is equity partnership to be fair to Suzuki and its proprietary technology and successful track record as a global small car manufacturer.

The government and the ministers similarly must learn to let go of the reins holding back the national car and treat automotive industry investors and manufacturers fairly according to their local content and value added qualities.

Who knows, Tan Chong Motor Group could be a fiercely aggressive competitor in the Asean region using Malaysia as its hub?

Anyway, the bottom line is such is administrative make-up of and mind of the men controlling GLCs, such as the late Malaysia Airlines, that they are not sustainable without huge government contributions.

It looks like Proton must make this Suzuki MOU into a real workable partnership as happened in India.

I wouldn’t mind a Celerio Diesel that’s claimed to return 27.62km/l of Euro5 and which is India’s most fuel-efficient car, followed by the Swift Dzire and Ciaz.

In Indonesia, the top selling Celerio is a three-cylinder petrol with CVT and priced at R158,000,000 or (RM44,000).

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