Let ‘ s save Proton

I read with interest a piece of news in Malaysiakini headlined “Proton, VW close to forming alliance”. In the report, it was mentioned that Volkswagen would either take the stake in Proton or in a new company into which Proton assets would be injected.

“Volkswagen is also seeking management control and will require the government to underwrite any losses at Proton for at least three years,” it said.

Although I am not a shareholder of Proton, I take a keen interest in it because firstly it is a national car, and secondly it was funded and subsidised using government funds which means the people’s money, which means my money and your money!! 

As  loyal citizens of this country, we would like to see Proton to be at least half as successful as Toyota Vios which is manufactured in Thailand. Toyota VIOs which has targeted Asean market initially, will now be exported to the whole world as a world car – that is how successful Thai Car industry is. Even though VIOS is not a Thai Brand, it has helped  uplift the whole Thai car industry, as many parts of that car are being sourced from Thai suppliers, and it has helped  provide thousands of jobs to the Thai people. Then there is Honda City, which is another success story by itself.

All is not lost. VW is a major car manufacturer in the world renowned for its high quality. It has in recent years turned around an ugly duckling, Skoda of Czech republic.

Skoda used to the laughing stock of the world. When a few of the earlier models were brought in to Malaysia many many years back, I remember my friends telling me how poorly made the car was, and that never buy a car from east Europe. But things have certainly changed.

Skoda was bought over by VW in 1991, and is now a renowned brand with high quality products. It is selling well in European market and is now  a major brand under the VW stable.

Skoda Auto was able to record net profits for the last week of 2006 totaling to 11.06 billion koruna or 392 million euros (515 million dollars). It obtained a 40% increase as compared to its earnings in the previous year.

Skoda Auto’s production also increased by 12.6 percent or 556,347 units with successful deliveries of up 11.7 percent resulting to an overall sales increase of 8.7 percent to 203.7 billion koruna. For this year, Europe’s largest automaker Volkswagen owner of Skoda is expecting for it to produce more than 600,000 cars. The Czech Republic’s biggest car maker is also planning to open up new markets in China, India, and Russia.

For a full story of Skoda, please read my earlier post many months back on this car.

As a Malaysian, I really hope that VW can help to turn around Proton and perhaps design a car that can be a world beater like the VIOS.

In this globalised world, not only technical knowhow is important to design a good and high quality car, but an efficient management is equally important. We cannot have the tidak apa attitude anymore if we want to compete against the world. Malaysian car market is too small for a car manufacturer to survive, any cars made in Malaysia must be prepared to face challenges outside , against other world brands . We must have hard working, efficient, knowledgeable people with foresight to helm this important industry in order to excel against others.

With a world brand, we can earn valuable foreign exchange (even though part of it will go to VW, we will still get a sizeable portion), and in addition, there will be spin off to encourage the growth of a whole car industry – the parts suppliers,  which will become world class suppliers too.

It will also create employment and uplift our scientific research and technical knowhow in other areas.

So, we have to look further and don’t let narrow nationalism cloud our vision in the rescue of Proton.