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NEWS UPDATES 3 August 2009

Malaysian carmaker keeps option open for partnership

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Malaysia’s Proton Holdings Bhd is keen to collaborate with a partner but is in no hurry to find one, a local business daily quoted the company’s Managing Director Syed Zainal Abidin Syed Mohamed Tahir as saying.

“We are not going to be pushed to find a partner. Yes, we are looking to collaborate but we are not setting a timeframe or a deadline to do so,” he told StarBiz.

“We always believe there are opportunities to work with OEMs (original equipment manufacturers) but it has to be a win-win situation before a decision is made.”

He said “several parties” had approached Proton and expressed their interest in collaborating with the national carmaker on various business possibilities, but nothing had been finalised.

The need for Proton to tie up with a partner, especially a foreign one, to boost its competitiveness, has long been a hot topic.

In July, Prime Minister Datuk Seri Najib Tun Razak told CNBC in an interview that the Government was open to the idea of a strategic foreign partner for Proton. Industry observers and analysts are equally unanimous on the subject and believe such a move would only benefit Proton.

Malaysian Automotive Association president Datuk Aishah Ahmad said a foreign partnership would give Proton access to the latest technological advancements that the automotive sector had to offer.

“Working with a (foreign) partner would also allow Proton to have better economies of scale and distribution rights in locations where it is not yet present,” she said. An AmResearch analyst agrees that Proton needs a foreign partner to maintain its competitiveness.

He reckons that if the Government were to liberalise the automotive sector after the National Automotive Policy (NAP) review sometime this quarter, Proton would face stiff competition.

“Currently under the NAP there is control of the number of foreign models that can be brought into the country, courtesy of the APs (approved permits),” the analyst said.

“Should there be a liberalisation of the industry, there would be less restriction in bringing in foreign models and there would be greater competition for a company like Proton.”

Aishah said that if liberalisation were an option, the Government would first ensure that Proton was on “firm ground” before deciding anything drastic for the local automotive industry.

In the past, Proton had been in talks with auto giants Volkswagen and General Motors, but the talks fell through.


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