Proton’S Creditors in Mhad Dreams of a Great to Own Cheaper Cars

alaysian Prime Minister, In other words, the Malaysian tax- cations to meet Federal pollution and Dr Mahathir Mohamed, payer was going to pay for Americans safety standards. Proton’s creditors in Mhad dreams of a great to own cheaper cars. The problem Japan scuttled the American deal. car-building empire that would be was, none of the Protons could be sold the envy of the world, but the reality in America without extensive modifi- Two decades on, the Proton car was a series of company is still expensive blun- in business, al- ders that mainly though for how benefited the much longer is Japanese com- anyone’s guess. panies that got With the Asean the contracts. Free Trade Agree- ment (Afta) now T h e f i r s t in place, the pro- Proton cars were tections that gave simply rehashed Proton a massive Mitsubishis from advantage in the a previous gen- home market eration, but with have been lifted. great fanfare Dr Proton’s share of Mohamed drove the Malaysian car the first one off the assembly line in market fell from around 60% in 2002 1985 and pronounced it to be ‘Ma- to 23% in 2007. laysia’s own car’. Within three years Proton held nearly three quarters of Proton is looking to an alliance the Malaysian car market. with a foreign company following the withdrawal of longtime Japanese Even though most Malaysians partner Mitsubishi. Proton desper- bought Protons, they bought Protons PROTON ately needs a strong partner – the mainly because the government im- Official name:Proton Holdings global car market is not an easy place posed 150–300% taxes on any non- Bhd for a formerly protected company to Proton. Although the Proton factory sell second rate vehicles at first rate Owned by: Khazanah Nasional generated 1500 new jobs, it cost an prices. Bhd (Malaysian government), estimated 6500 old jobs, lost as other 43%. factories closed or laid off workers due Proton recently signed a contract to the preferential treatment given to Owns: British carmaker Lotus. with China’s Jinhua Youngman Au- Proton. Worse, the rising Yen (Proton tomobile Manufacturing Co to export had to pay Mitsubishi a royalty for Current situation: After hold- 30,000 Gen-2 cars to be sold in China every vehicle sold) soon pushed the ing nearly three quarters of under the brand ‘Europestar’. Proton price of all cars sky-high. For many the Malaysian car market in is also attempting to set up a joint Malaysians even the cheapest Proton 1988, Proton was down to venture with Indian-based vehicle cost more than the cost of a house. 23% by 2007. Unless Proton maker Hero. finds a strong business part- In hock to Mitsubishi to the ner, it seems doomed. Proton Rumours and news items have tune of several hundred million, Dr has recently signed a contract suggested that Malaysian billionaire Mohamed had produced a car that with China’s Jinhua Youngman Syed Mokhtar Al Bukhary may be few people wanted outside Malaysia, Automobile Manufacturing Co interested in acquiring a controlling and few people could afford inside to export 30,000 Gen-2 cars. stake in the Proton company. Others Malaysia. Proton is also attempting to set suggested that Proton’s management up an alliances with Indian vehi- would buy out the company. It was With a shrinking local market- cle maker Hero, among others. also claimed that rival Malaysian place, an ever-optimistic Proton Chances of survival: poor. company RB-Hicom had made a bid looked to exports to fill the gap. The Globally, there are too many to purchase 32% of the beleaguered tiny American company Bricklin car companies and not enough Proton company. No one knows what was going to sell millions of Proton buyers. Small, poorly run and the future will bring • cars for less than they sold for in under-financed car companies Malaysia. face an almost certain doom • All content © The Dog & Lemon Guide 2011. All rights reserved.

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