Proton does not have to go under.
Finally, a strategic partner has come to rescue the ailing carmaker despite several failed attempts in the past and in so doing, has saved Malaysian taxpayers billions more in financial assistance.
Selling a 49.9% stake to Geely is indeed a good move. It means a much-needed financial injection, the use of advanced technology, better management strategies, improved production, as well as new and bigger markets.
After 33 years, Proton will now be able to stand on its own feet.
Some 60,000 direct and indirect jobs will be saved, and 200,000 vendors, distributors and suppliers will not have to fold.
More jobs will be created as plans are afoot to increase production to 500,000 cars by 2020 from an annual production of 150,000 in 2016, as well as to assemble Volvo cars.
Proton can tap into the synergies of Volvo’s talent pool and Geely’s global facilities, including 16 manufacturing plants, five R&D centres and seven design studios.
The Proton name can still live on as Geely plans to manufacture some of its models under the Proton brand.
Proton will be able to grow its sales abroad and salvage its lost global presence. The move will open the door to China’s huge consumer market with annual car sales of 28 million.
With improved production methods and capacity, Proton will be in a better position to compete in the Asean market with 623 million consumers and a growing middle class.
This would increase Proton’s sales which have been dismal – its 2016 sales fell to only 15% due to strong competition from cheap and better-quality imports.
Geely has an impressive track record. The 2016 sales of its own brand rose 50% from 2015; and since its takeover of Volvo, the Swedish carmaker rolled out over 500,000 cars, the highest number in its 90-year history. Geely is 16th on the World Car Group ranking by sales, including the Volvo brand.
I believe this bodes well for Proton and for Malaysia. It’s time we drive the Proton badge around the region with pride again.
‘Hopeful Malaysian’ is an FMT reader.
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