KUALA LUMPUR: The impending collaboration between Malaysian car company, Proton, and a foreign strategic partner (FSP) will not only maximize the manufacturing capacity at both its Shah Alam and Tanjung Malim plants but also allow the company to compete effectively, regionally and globally.
The partnership will also enable Proton to compete with car manufacturers like Honda, Toyota and others.
Dr Irwan Shah Zainal Abidin, director of the Asian Research Institute of Banking and Finance, said Proton had no other choice but to undertake a management paradigm shift as the country’s limited population of 30 million did not offer the manufacturer economies of scale to compete internationally.
Joining hands with a foreign strategic partner would not only result in increased production and sales but also help the car manufacturer carve a bigger market share.
Proton’s current market share is only a meagre 14 per cent compared with between 63 and 64 per cent in the 90s.
This will only benefit Proton, via technology transfer, and provide add value to local vendors in terms of engineering management expertise.
Indirectly, this will help Proton shift into higher gear.
In the long-run, Irwan said the Proton-FSP collaboration would help rescue Proton’s vendor network given the fact that orders for car components had dwindled drastically as sales were significantly off-target.
“The prospective FSP will inject capital into Proton, raise vendors’ activities and generate employment,” he said, adding that if the capacities at both the Shah Alam and Tanjung Malim plants are merged, production would rise to 400,000 units annually.
This will immediately enable Proton to have a wide reach as envisaged in the Regional Comprehensive Economic Partnership which potentially includes more than 3 billion people or 45 per cent of the world’s population.
