A QUESTION OF BUSINESS | The only way to get Proton to move forward firmly is to understand and accept once and for all that Proton never produced and will never produce a Malaysian car – almost all the cars that it has produced, and especially the more successful and reliable ones, had plenty of foreign input in terms of engine, gearbox, chassis, design, development and engineering.

Producing a completely Malaysian car, an idea so cherished by former prime minister Dr Mahathir Mohamad – and rashly and irrationally pursued – was an abject and abysmal failure. It could have cost Malaysians as much as a massive RM360 billion from the time the first Proton rolled out from the Shah Alam assembly plant in 1985.

As a new Chinese CEO takes over Proton’s manufacturing operations, the group, currently owned by DRB-Hicom Holdings, announced that Proton, with help from China’s Zhejiang Geely Holding Group (Geely), will turn around within five years. Geely acquired a 49.9% stake in Proton for RM460.3 million from DRB-Hicom which owns the remaining 50.1% stake in Proton, DRB-Hicom announced.

However, the deal is more complex than that and details are in this column I wrote at the time of the deal. Basically, while the overall deal is valued at about RM770 million, some aspects are excluded which are detrimental to Proton and DRB-Hicom. This includes valuable land in Proton, and Lotus – the wholly-owned British specialist sports car manufacturer. Lotus was sold for RM560 million to Geely (51%) and influential, connected businessman Syed Mokhtar Albukhary and his wife (49%).

In fact the exclusion of the land from the Proton deal could result in as much as RM3.5 billion in profits for the DRB-Hicom group which is controlled by Syed Mokhtar.

With such a track record, it looks like the best things in Proton – valuable land and Lotus – are being milked out to Syed Mokhtar’s DRB-Hicom, to Syed Mokhtar himself and Geely, leaving the troubled car manufacturing operations under Proton still majority controlled by DRB-Hicom with Geely a substantial minority partner holding the remaining 49.9%.

Rebadged Geely cars

So what are the prospects for Proton and what will happen? What will likely take place is that Proton will effectively sell rebadged cars from Geely starting with the successful Boyue SUV which will be merely reengineered to right-hand drive for the Malaysian and Asean market.

Make no mistake about it – this will be a Chinese car, not a Malaysian one. But that is no different with almost all Proton cars previously manufactured with foreign help. In fact, the same has been true with Perodua, the other national car, which effectively sells rebadged Daihatsu cars. There are no Malaysian cars – only cars with varying degrees of Malaysian content with no significant parts manufactured in Malaysia.

But despite its cars being Chinese, Proton will continue to be accorded Malaysian status, giving it access to considerable protection by the Malaysian government behind whose tariff barriers it will continue to be given the right to profit by exploiting the Malaysian public which will continue to pay higher prices for all Malaysian cars.

And so, giving it a profit base from Malaysia, Proton will venture out into the Asean market and eventually into the world market. But it will not be a Malaysian car – Proton will sell a car developed by a Chinese company with Chinese expertise and enterprise...