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Problem-plagued Proton ‘in trouble’

October 17, 2012

DRB-Hicom working out plan to remedy the national carmaker's problems.

by Azli Jamil

KUALA LUMPUR: DRB-Hicom Bhd will announce a working plan to remedy problems faced by national carmaker Perusahaan Otomobil Nasional Bhd (Proton) next month, said its chief operating officer Che Khalib Mohamad Noh (picture).

The plan is paramount and if not implemented could bring serious negative consequences to DRB, a major investor in Proton, said Che Khalib.

“Proton is in trouble and if we don’t solve Proton’s problem, not only Proton would go down but the whole DRB will go down,” Che Khalib said after his presentation at the Malaysian Institute of Certified Public Accountant-Bursa Malaysia Business Forum in Kuala Lumpur yesterday.

He, however, did not elaborate on the details of the problems faced by Proton. The problems, if not resolved, would affect its 11,000-plus employees and the whole automotive ecosystem surrounding Proton, he said.

Meanwhile, a newswire reported yesterday that DRB’s group managing director Mohd Kamil Jamil said Proton’s performance would have an impact on DRB as the acquisition of Proton was a major financial investment for the former.

The report quoted Mohd Khamil as saying that DRB’s management can add value to Proton and realise its potential as the national carmaker before finalising a turnaround plan.

It was reported in September that Mohd Khamil said DRB planned to introduce a yet-to-be announced foreign partner to Proton.

In the same report, it said Proton has raised the domestic sales target to 200,000 units for the current financial year ending March 31, 2013, up from 167,000 previously. Furthermore, Proton has been given an additional RM120 million funding for development of hybrid vehicles.

It is expected to roll out its hybrid electric vehicles (EV) by 2014, according to International Trade and Industry Minister Mustapa Mohamed in a reply at Parliament end of September.

DRB-Hicom bought a 42.7% stake in Proton from Khazanah Nasional Bhd for RM5.50 per share or RM1.29 billion in January this year. Proton is currently ranked second behind Perusahaan Otomobil Kedua Sdn Bhd (Perodua), losing its number one position in 2006.

According to a newswire report, Perodua has emerged the top selling car maker with 92,923 units sold in the first-half of this year vis-à-vis 79,467 cars sold in the same period last year while Proton is in second spot with fewer cars sold at 72,837 units for the period under review against 85,223 units in the first six months last year.

(This content is provided by FMT content partner The Malaysian Reserve.com)


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