malaysia automonile industry

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Some analysts doubt that Proton, launched by Mahathir in 185, can rise to the challenge of open competition. Blue-sky thinkers who think in terms of Proton emerging as a stand-alone regional brand are deluding themselves, as there is simply no chance of Proton competing head-on and regionally with the likes of Toyota and Honda in the mass-market saloon business, says Patrick Russell of Kim Eng Securities in Kuala Lumpur. He notes that there is no country with a population of less than 50 million that has its own independent car maker.

That doesnt mean that Proton is doomed. On paper, the company -- with cash reserves of almost four billion ringgit (about $1.05 billion) and profits which are expected to exceed one billion ringgit each year between now and 005 -- is one of Malaysias most financially sound concerns. But that is largely due to the de facto subsidies that allowed Proton to undercut competitors with its middle and low-price models for years. Moreover, Protons apparent health could deteriorate quickly once the company faces rivals on an equal footing in the regional market.

Even Protons chief executive officer, Tengku Mahleel Tengku Ariff, concedes that Proton, in its present form, will find it difficult to survive without protection. But he insists that the car maker will be Afta-ready by 005, when a set of new Proton strategies now being readied falls into place. They include beefing up its distribution network and churning out more models powered by Protons home-made engines. Our own engines will not only be cost-efficient, but we will have a strong export business because of quality, says Mahleel. Whether they will prove sufficient to power Proton down the turbulent road ahead is anybodys guess.






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