By now, almost every single Malaysian would have known that the national car maker Proton Holdings Bhd is now a subsidiary of conglomerate led by billionaire tycoon Tan Sri Syed Mokhtar Albukhary, DRB-Hicom Bhd, after the latter acquired Khazanah Nasional Bhd's block of stake in the automotive group.
It was said that DRB-Hicom will rope in German auomaker Volkswagen AG as a partner to turn around Proton and improve the group's brand and quality, especially for export market, since the domestic automotive industry is already matured and saturated.
Proton exports a little over 20,000 units of its cars to other markets, a number which is very small for the group to become globally competitive. In fact, Proton can not depend on the domestic auto market alone to drive its growth for reason I stated above.
Besides the imminent partnership with Volkswagen (DRB-Hicom has long being a partner to the German giant), there are also talks that General Motors is keen to utilise Proton's plant to be its South East Asian base. There is also the long standing relationship with Japan's Mitsubishi Motor Corp as it has been Proton's partner since day one.
DRB-Hicom, as the ultimate shareholder of Proton, should decide how it plans to turn around Proton. It has the option to just make Proton as a 'rebadging' automaker, that is by just assembling cars by other automotive group and stamp its badge on top of it, just like the Inspira.
This should make Proton profitable, as it doesn't have to invest substantially in new models and new technology, it will just become another extension of DRB-Hicom's automotive business. However, this will diverge from the raison d'etre of Proton itself , which is to speed up the industrialisation process of Malaysia.
As Malaysia rise up in terms of gross domestic product (GDP) per capita, and aspires to become an industrialised and developed country, it has to move its industries up the value chain. It can no longer afford to become a low cost, low value added manufacturing base like it was twenty years ago.
The partnership with Volkswagen seem to be the best options for all parties. Proton could utilize technology transfers from the Germans, and Volkswagen could utilise Proton's Tanjung Malim plant for its assembly base in South East Asia.
However, there is no guarantee that with Volkswagen in the team to turn around Proton, the national automaker would finally become a force to be reckon with. Proton should not just be another Skoda to Volkswagen for it to become internationally acclaimed like Hyundai-Kia.
Perception has a lot to do with the value of its brand. It is in fact the hardest thing to do, to change people's perception of Proton cars being cheap in all aspect, including quality. DRB-Hicom has to invest heavily into developing Proton's technology, quality and design for it to gain back the people's trust.
Proton need to expand its export market. South East Asia should be its main target, rather than Australia, South Africa, or Iran. It has to carve out a substantial market share in the region's large economies with large populations and rising income such as Indonesia, Thailand, Vietnam and the Philippines.
It has to study the market really well. Indonesia now maybe a big market for multi-purpose vehicles (MPV) and sport utility vehicles (SUV), but Proton should not just focus on these type of cars just to tap the Indonesian market.
Indonesia's rising economy should alleviate millions of its people from poverty and entering the middle class segment. As Indonesia is still lacking in infrastructure especially in public transport in its major cities such as Jakarta, Surabaya, Bandung and Medan, more people will have to rely on private vehicles for transportation.
In the near future, car ownership in Indonesia will become what it is right now in Malaysia - a necessity rather than luxury. Proton should take advantage in this growing economy and expand its present there. As the evolution of Indonesia's economy continues, more of its people would want a nice car at low cost.
Proton could tap the Asean Free Trade Area (AFTA) agreement to its advantage to expand its presence in Indonesia. It has almost 100% content made in Asean, so it should have cost advantage to other automakers especially those from Japan and South Korea.
The same goes to Thailand, Vietnam and the Philippines. But again, brand awareness and perception could become the decider in Proton's bid to strengthen its domination in the local automotive market as well as its export markets.
Proton's journey as a contending automaker in Asia Pacific is just about to start, with DRB-Hicom at its helm. So sit back, Malaysian, and lets just pray for the best for the national pride. A lot has been said about Proton, but it is not wrong or spent for us to believe that one day, Proton could actually stand on the same league as the other car makers in the global arena.
It was said that DRB-Hicom will rope in German auomaker Volkswagen AG as a partner to turn around Proton and improve the group's brand and quality, especially for export market, since the domestic automotive industry is already matured and saturated.
Proton exports a little over 20,000 units of its cars to other markets, a number which is very small for the group to become globally competitive. In fact, Proton can not depend on the domestic auto market alone to drive its growth for reason I stated above.
Besides the imminent partnership with Volkswagen (DRB-Hicom has long being a partner to the German giant), there are also talks that General Motors is keen to utilise Proton's plant to be its South East Asian base. There is also the long standing relationship with Japan's Mitsubishi Motor Corp as it has been Proton's partner since day one.
DRB-Hicom, as the ultimate shareholder of Proton, should decide how it plans to turn around Proton. It has the option to just make Proton as a 'rebadging' automaker, that is by just assembling cars by other automotive group and stamp its badge on top of it, just like the Inspira.
This should make Proton profitable, as it doesn't have to invest substantially in new models and new technology, it will just become another extension of DRB-Hicom's automotive business. However, this will diverge from the raison d'etre of Proton itself , which is to speed up the industrialisation process of Malaysia.
As Malaysia rise up in terms of gross domestic product (GDP) per capita, and aspires to become an industrialised and developed country, it has to move its industries up the value chain. It can no longer afford to become a low cost, low value added manufacturing base like it was twenty years ago.
The partnership with Volkswagen seem to be the best options for all parties. Proton could utilize technology transfers from the Germans, and Volkswagen could utilise Proton's Tanjung Malim plant for its assembly base in South East Asia.
However, there is no guarantee that with Volkswagen in the team to turn around Proton, the national automaker would finally become a force to be reckon with. Proton should not just be another Skoda to Volkswagen for it to become internationally acclaimed like Hyundai-Kia.
Perception has a lot to do with the value of its brand. It is in fact the hardest thing to do, to change people's perception of Proton cars being cheap in all aspect, including quality. DRB-Hicom has to invest heavily into developing Proton's technology, quality and design for it to gain back the people's trust.
Proton need to expand its export market. South East Asia should be its main target, rather than Australia, South Africa, or Iran. It has to carve out a substantial market share in the region's large economies with large populations and rising income such as Indonesia, Thailand, Vietnam and the Philippines.
It has to study the market really well. Indonesia now maybe a big market for multi-purpose vehicles (MPV) and sport utility vehicles (SUV), but Proton should not just focus on these type of cars just to tap the Indonesian market.
Indonesia's rising economy should alleviate millions of its people from poverty and entering the middle class segment. As Indonesia is still lacking in infrastructure especially in public transport in its major cities such as Jakarta, Surabaya, Bandung and Medan, more people will have to rely on private vehicles for transportation.
In the near future, car ownership in Indonesia will become what it is right now in Malaysia - a necessity rather than luxury. Proton should take advantage in this growing economy and expand its present there. As the evolution of Indonesia's economy continues, more of its people would want a nice car at low cost.
Proton could tap the Asean Free Trade Area (AFTA) agreement to its advantage to expand its presence in Indonesia. It has almost 100% content made in Asean, so it should have cost advantage to other automakers especially those from Japan and South Korea.
The same goes to Thailand, Vietnam and the Philippines. But again, brand awareness and perception could become the decider in Proton's bid to strengthen its domination in the local automotive market as well as its export markets.
Proton's journey as a contending automaker in Asia Pacific is just about to start, with DRB-Hicom at its helm. So sit back, Malaysian, and lets just pray for the best for the national pride. A lot has been said about Proton, but it is not wrong or spent for us to believe that one day, Proton could actually stand on the same league as the other car makers in the global arena.
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