Proton charts its own course

PROTON CEO Tengku Mahaleel has confirmed that Malaysia's national car company is negotiating more strategic alliances along the lines of the one recently announced with MG Rover.

But he rejected the prospect of establishing a financial partnerships with one of the world’s major car companies as being a necessity for Proton.

That’s despite Proton’s falling car market share in Malaysia where for the past two decades it has been protected by high tariff walls which are now being deconstructed. The company also recorded a loss in the third quarter of the financial year.

“Rather than strategic partner, I think strategic alliance is a better word,” Tengku Mahaleel told Australian media during a media visit to Proton earlier this month.

His words fly in the face of western automotive analysts who query MG Rover’s decision to align with Proton “to explore the feasibility of a number of collaborative projects”.

One anonymous analyst quoted recently said Proton was “slowly dying. Unless the government wants to keep throwing money at it, there’s no way it can survive without radical change and that can only be done with outside help.”

Tengku Mahaleel dismisses that type of opinion pointing out Proton is virtually debt-free, cash rich and in the process of developing an entirely new 20-model strong range of vehicles which will be built in a brand new plant at Tanjung Malim, 100km from Kuala Lumpur.

“What is the weakest point of Proton today?” he asked. “The weakest point of Proton is called Proton, the brand is so weak.

“From the perspective of big, large companies, what can they give to me in brand? The answer is nothing. Volkswagen won’t give me their brand, Mercedes will never allow me to have their brand.”

Instead, Tengu Mahaleel advocates a strategy of alliances with manufacturers like Proton which have holes in their ranges that need to be filled.

Obviously, MG Rover needs a small car and Proton is in the process of launching three different models – Gen.2, SRM and TRM, as well as a substantially facelifted Waja.

Proton would like a large car and V6 engines quicker than it can develop and build them itself.

“There will be gaps in our line-up because the whole product plan takes a long time to incubate,” Tengku Mahaleel said.

“I think Rover and all the other companies we are discussing with have gaps in their plans too.

“So it’s filling all those gaps, how can each of us fill those gaps so we are viable and able to compete.”

Alliances also enable Proton to enter more export markets, an area the company has to grow in as Japanese and Korean manufacturers take large slices of its domestic market.

Proton has identified semi-developed non-G15 countries as prime growth opportunities over the next few years as it strives to build exports from around 15,000 per annum to 200,000 by 2010.