The Proton VW Deal
The former PM and now Proton Special Advisor, the Tun said last year, Proton "has become a success. Proton cars have been exported to England. We also export to Turkey, Egypt, Lebanon and many other countries."
The number of Proton cars exported annually is around 1000, does that make Proton a success overseas? Even domestic sales of Protons have fallen from commanding 60% of the local market once, this has dropped to about 43% this year.
Earlier on the Tun had repeatedly said that Proton has little need for a foreign partner but recently Proton and Volkswagen announced a long-term strategic alliance. According to a report in Asia Times, under the plan, Proton will produce two VW models for Southeast Asia. The German car maker will give Proton access to VW's global distribution network, which Proton will use to boost exports. Proton will also be able to use Volkswagen engines and other forms of technology, according to representatives on both sides of the deal.
An equity stake for VW in Proton appears not to be a part of the plan, and some see this as necessary to produce long-term benefits for Proton, some say it is not necessary. Being aware that the Germans can be very hardnosed, not having an equity stake in Proton may mean that VW is preparing a 'backdoor' just in case.
Proton's reputation, and its export potential in turn, has been further damaged by unreliable quality and poor customer service over the years. Though Proton has resolved some points in these areas, Volkswagen's presence is expected to cause some rubbed-off effects. This may enhance Proton's potential for a bigger export market and this may inturn help Proton's economies of scales in production. In the coming years, Proton's domestic market demands is unlikely to go back to those hey days where it commanded 60% of the market. The Japanese and Koreans are already fighting in the Malaysian maarket to bring down Proto's share.
A Malaysiakini columnist has also cautioned regarding the deal, saying that 'Proton is not out of the woods'. he also noted that the market response to the said deal was lukewarm.
Proton will have a lot of homework and housekeeping to do to ensure it does not get the short end of the deal with VW. It has got to prove that it is ready to go with the national slogan of the day :: Cemerlang, Gemilang dan Terbilang.
For more on tthe Proton Story, click here
The number of Proton cars exported annually is around 1000, does that make Proton a success overseas? Even domestic sales of Protons have fallen from commanding 60% of the local market once, this has dropped to about 43% this year.
Earlier on the Tun had repeatedly said that Proton has little need for a foreign partner but recently Proton and Volkswagen announced a long-term strategic alliance. According to a report in Asia Times, under the plan, Proton will produce two VW models for Southeast Asia. The German car maker will give Proton access to VW's global distribution network, which Proton will use to boost exports. Proton will also be able to use Volkswagen engines and other forms of technology, according to representatives on both sides of the deal.
An equity stake for VW in Proton appears not to be a part of the plan, and some see this as necessary to produce long-term benefits for Proton, some say it is not necessary. Being aware that the Germans can be very hardnosed, not having an equity stake in Proton may mean that VW is preparing a 'backdoor' just in case.
Proton's reputation, and its export potential in turn, has been further damaged by unreliable quality and poor customer service over the years. Though Proton has resolved some points in these areas, Volkswagen's presence is expected to cause some rubbed-off effects. This may enhance Proton's potential for a bigger export market and this may inturn help Proton's economies of scales in production. In the coming years, Proton's domestic market demands is unlikely to go back to those hey days where it commanded 60% of the market. The Japanese and Koreans are already fighting in the Malaysian maarket to bring down Proto's share.
A Malaysiakini columnist has also cautioned regarding the deal, saying that 'Proton is not out of the woods'. he also noted that the market response to the said deal was lukewarm.
Proton will have a lot of homework and housekeeping to do to ensure it does not get the short end of the deal with VW. It has got to prove that it is ready to go with the national slogan of the day :: Cemerlang, Gemilang dan Terbilang.
For more on tthe Proton Story, click here
posted by Lone @ 11/09/2004 10:14:00 AM
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