Proton Will Collapse Without a Foreign Partner
Proton Holdings Bhd., Malaysia's biggest carmaker, will collapse unless it finds an international partner such as Volkswagen AG, said former premier Mahathir Mohamad, who set up the company more than two decades ago.
"At the rate it is going, it's not going to last long," said Mahathir, 80, who became an adviser to the Shah Alam, Malaysia-based automaker after stepping down as prime minister in 2003. "Proton is reporting losses all the time, and they still have a lot of cars which they cannot sell."
Proton has been losing market share to overseas rivals including Toyota Motor Corp., and needs to gain new technology and designs to compete. Volkswagen ended talks with the Malaysian carmaker in January because the two sides couldn't agree on issues including control of the company.
"The government may need to offer a bigger stake or give up management control," said Raymond Tang, who manages $1.7 billion as chief investment officer of CIMB-Principal Asset Management Bhd. in Kuala Lumpur. Those are "the main points which they failed to agree on in previous talks," said Tang, who doesn't own the company's shares.
Proton, which produces eight car designs under its brand and two types of Lotus sports cars, has been seeking a foreign partner since Mitsubishi Motors Corp. and Mitsubishi Corp. ended more than two decades of investment in the company in January 2005.
Proton's Chairman Mohammed Azlan Hashim and Managing Director Zainal Abidin Syed Mohd Tahir weren't immediately available for comment.
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