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AseanAffairs Magazine July - August 2010

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Starting out with a background in engineering, Dato’ Haji Syed Zainal Abidin has been heading Proton since Jan. 1, 2006. He came to Proton after spending six years with the Proton’s archrival, Perodua. Proton was founded in 1983 by the President Mahathir and was Malaysia’s only carmaker until Perodua started up in 1993. The Malaysian government still owns more than 42 percent of Proton through a holding company.

During its first decade, Mitsubishi Motors was Proton’s international partner and Proton models featured Mitsubishi parts, engineering and expertise. As technology was transferred, Mitsubishi left the scene, leaving a void. Recent talks between Proton and Volkswagen collapsed in June when Volkswagen withdrew.

Proton exports cars to the United Kingdom, South Africa, and Australia and the company is aggressively marketing its cars in several other countries including the Middle East . Besides that, Proton has also been exporting a small volume of cars to Singapore, Brunei, Indonesia, Thailand Nepal, Sri Lanka, Pakistan, Bangaladesh, Taiwan, Cyprus and Mauritius.

Abidin took the time to answer these candid questions posed by Asean Affairs.


Q: Malaysia is forecast to post significant growth in domestic car sales in 2010. Will the total sales in 2010 break the record taken in 2005?

A:  The total of domestic sales of cars in 2005 was 552,316 units. This year, the Malaysian Automotive Association forecast a total of 550,000. In my opinion, the effectiveness of the stimulus package will definitely affect this year’s total, and there is a possibility that sales in 2010 can surpass 2005.


Q: Apart from the expected rise in GDP, what are the other key factors that would contribute to this sales increase?

A:  I would say that some of the key factors that can affect automotive sales are interest rates, fuel prices, currency rate and the Government’s Auto Scrapping scheme.


Q: Is Malaysia still ahead of Thailand in terms of total passenger car sales? What are the prospects for growth in this top-selling segment?

A:  As at January 2010, Malaysia is still ahead of Thailand. The total of our passenger cars rose from 32.2 percent to 45,973 compared with a year earlier. Thailand’s passenger car market rose 53.2 percent to 20,721 units compared to a year earlier. The prospects are high for further growth. We intend to do so by introducing more environmentally friendly vehicles such as the hybrid and Electric Vehicles (EV) in the future.

Q: What has been the industry’s response to the New Automotive Policy that came into force in January? Will it attract more foreign investment into the automotive industry in Malaysia?

A:  It depends. I would expect more partnerships and strategic tie-ups to happen in the local scene, especially in the developments of vehicles with midsize to large engines, hybrid and EVs.


Q: Do you think it will make the industry more competitive? 

A:  Yes, and it will be a healthy competition - one that will consolidate the production capacity of the country. 


Q: There have been comments from industry analysts that the New Automotive Policy initiatives are not strong enough to draw investors’ attention for them to consider Malaysia as an export hub. What is your take? 

A:  First we need to take a step back and understand that Malaysia is competing with Thailand and Indonesia as export hubs,so the competition is stiff.
Between these three countries, Malaysia is the most difficult to balance, because while we want to attract investors, we still need to take care of our own local brand. So, the government has actually been doing a great job with this tough balancing act. More importantly, I believe Malaysia can be a strong hub as Malaysia intends to become a leader for green vehicles.


DATO’ HAJI SYED ZAINAL ABIDIN BIN SYED MOHAMED TAHIR Group Managing Director, Proton Holdings Berhad Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir was appointed Group Managing Director of PROTON on 1 Jan. 2006. He also sits on the boards of various subsidiaries within the PROTON Group of companies. Dato’ Haji Syed Zainal Abidin, who graduated with a bachelor of science in engineering from the University of Maryland, USA, began his career as a project engineer with Petronas Gas Sdn Bhd in 1987, prior to joining Petroliam Nasional Berhad in 1992 as the senior executive of the company’s Corporate Planning & International Business Development unit........




Q: How does this new policy encourage local players to set up partnerships with foreign automakers?

A:  It is very encouraging in the sense that we can jointly assemble existing and new models for the domestic and Asean region, vehicles that can be exported to other regions.

Q: What are the latest developments in Malaysia’s drive to promote clean and sustainable energy, particularly on the automotive industry front?

A:  So far, the New Economic Model has announced, amongst others, a new energy policy that will be unveiled this year, policies to manage renewable energy resources, the development of banking capacities to assess credit approvals for green investments (using a non-collateral-based criteria), and a more liberal entry of foreign experts specialising in financial analysis of viability of green technology projects.

As for Proton, we view all this as opportunities, hence, we have already taken steps in response to these policies, mainly with the development of green vehicles – hybrids and EVs – in fact, we previewed the EMAS, our Global Concept Car, at this year’s Geneva Motor

Show. But this isn’t just about adhering to government policies or creating concept cars that will just stay as concept cars. To us, the EMAS is our big step in moving forward, not only in terms of design, but also towards a more green approach to the way we do things – we see this as part of our responsibility in becoming more environmentally conscious.


Q: Do you see any substantial effect on Malaysia’s automotive industry after the launch in January of the Asean Free Trade Agreement (AFTA)?

A:  Yes. The deregulation measures on the CBU, CKD and automotive parts, have definitely opened up a lot of opportunities for new Malaysian companies.











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