What is going on in the brains of the management of Proton? It's clearly Proton is dying, and if they're really serious of salvaging the first car manufacturer of the country that used to be the proud of the nation, something should be done quickly!!.
Stop the talking and please show some actions instead.
March 9 (Bloomberg) -- The Malaysian government may miss its deadline to find a partner for Proton Holdings Bhd. after Volkswagen AG and General Motors Corp., potential investors for the unprofitable Asian carmaker, said no decision is imminent.
The government has said it will find an outside partner for the state-controlled company before April. The company's cash on hand has fallen 66 percent over the last year to 412 million ringgit ($118 million) as of Dec. 31.
PSA Peugeot Citroen ended talks with Proton this week and Volkswagen's and GM's chief executives said talks were still in early stages. Proton, which last month reported its biggest quarterly loss in at least eight years, has sought an alliance since Mitsubishi Motors Corp. ended their partnership in 2004.
"The company is not making money and they keep turning out models that don't really sell," said Rosnani Rasul, an analyst at TA Securities who rates the company "buy" on the expectation they'll win a partner. "This year they're going to be losing something like 700 million ringgit, wiping out shareholders' funds. Without a partner, they've got only two or three years to last and I'm being generous."
The company needs help coming up with new designs and technology to stem falling sales at home, where it is losing ground to rivals Perusahaan Otomobil Kedua Sdn. and Toyota Motor Corp. For Volkswagen and General Motors, an alliance with Proton may provide them better access in Asia, including Japan, the world's third-biggest car market. Under a free trade agreement signed between Malaysia and Japan, Malaysian-made cars will be able to be distributed in Japan without import duties by 2012.
Talks on Proton remain "extremely" preliminary, General Motor Chief Executive Officer Rick Wagoner said in a March 6 interview. "It's my sense that there's a lot of work to do."
"You can always talk," Volkswagen's Chief Executive Officer Martin Winterkorn said in a separate interview the same day. "You can expect some kind of decision in the next half year."
Malaysia's government controls Proton though a 43 percent stake held by Khazanah Nasional Bhd., a government investment unit. Former Prime Minister Mahathir Mohamad, who set up Proton in 1983, said last year the business will collapse without a foreign partner.
Proton shares have added less than 1 percent this year, trailing a 9.1 percent gain by the benchmark Kuala Lumpur Composite Index. The shares fell 1.5 percent to 6.65 ringgit as of 12:27 p.m. in Kuala Lumpur.
GM last year added Malaysia to a list of 11 emerging market countries where the Detroit automaker is trying to increase sales. GM sold 55 percent of its cars and trucks outside of the U.S. last year and Asia-Pacific was the most profitable region for the company. It only sold 991 vehicles in Malaysia.
GM is cutting $9 billion from costs this year after convincing 34,300 U.S. union workers to leave early as part of a plan to close 12 North American locations by the end of 2008. GM lost $10.6 billion in 2005 and $3.03 billion in the first nine months of last year.
The company "has so many problems of its own that a tie-up with Proton does not make business sense," said Donald Gimbel, who manages about $1.8 billion at Carret & Co. in New York. "They have too many brands as it is."
Vehicle sales in Malaysia, the largest passenger car market in Southeast Asia, fell 11 percent to 490,768 units last year, the first decline in three years as lower used-car prices, stricter lending, costlier fuel and higher interest rates curbed demand. Malaysians typically sell their old cars to fund new purchases.
The Malaysian Automotive Association predicted vehicle sales will be little changed at half a million units this year. Last year the government ended more than two decades of tariff protection for Proton by cutting import duties for cars made in Southeast Asia.
Even with tariff protection, Proton has lost market share. Proton's market share fell to 32 percent in 2006 from 40 percent in 2005, according to the Malaysian Automotive Association.
"The crucial question at the end of the day is, is it worth it" to invest in Proton, said Marc-Rene Tonn, an analyst at MM Warburg Investment, based in Hamburg.
tags : proton malaysia mahathir mohamad Volkswagen AG General Motors Corp car PSA Peugeot Citroen