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Friday, June 08, 2007

Writing's on the Wall for Proton?

It is a national shame that Proton with more then 20 years auto manufacturing experience did not do more to compete in the international market.

Perhaps the government's policy of protection against car imports created the situation whereby all those sub-contractors of parts did not really have to do much to profit immensely from the guaranteed business.

Of course when the furore started over the massive APs allocation to a few individuals, many people cried "Foul play! " especially those who were not AP recipients.

While the justification for awarding so many APs to so few still has not been given, in a way it is good that Malaysians can now purchase imported cars at more realistic prices though we still have a long way to go to remove artificial taxes like the AP.

This article is very interesting as it shows how innovative product development and aggressive marketing coupled with stringent quality standards can equate to success in the highly competitive automative market.

Just 2 details from the article:

The owner of the company works 75 hours a week and he estimates to set up a parts factory in China with 20 workers would cost US$4m and the labour costs for those 20 workers would be US$40,000 pa or the equivalent of one US unionised worker.

It sure begs questions as to why and how Proton invested millions in the doomed MV Augusta in Europe that really was a high cost centre.

The most prudent thing for the stakeholders in Proton to do is to have a paradigm shift in thinking we can still support the protected car policy and let any foreign car maker buy the controlling stake. The national car project died when the APs took over. It is now time to bury it.

1 comment:

Trashed said...

Somewhere along the lines, Proton made a strategic misstep. They failed to capitalise on the small car market which Perodua took on.

Did politics play a role in this by allowing a second car manufacturer get into the market ? Proton could have had the small and mid-sized car market all to themselves but decided to go up the market segments.

At the end, the local market (once allowed to compete on more equal footing) decided. And if you cannot compete in your own national market, how to compete globally ?