Tuesday, January 20, 2009

The Proton Fairytale

My opinions on Proton was published today in The Star. I was so busy that I didn't have time to read the papers at all till 8pm.

Before I even managed to see my article in the papers, I received a few calls and messages from friends and family about it. Some disagreed with me and said the biggest problem with Proton is quality.

Look at the Big Three carmakers in the United States of America. Are they really good carmakers?

I agree they are. Their utes, sedans, trucks and 4WD are amazing machines. But at what price do they come in? Read on and try to understand the fairytale.

Proton is going to be 26 years old. When we started off with Proton Saga in the 1980s, Malaysian engineers learnt from there with the assistance of Mitsubishi, as much as they could.

Resources, knowledge and finances were limited - only to be enhanced by the backing of our Malaysian Government and protectionist policies.

The Malaysian Government is actually very poor. Malaysians will get mad if we have something like this - Uncle Sam Grabs the Wheel.

We want quality cars but at the price of mud and dirt. Be patient, I am sure many will begin to disagree with me already. Read on and you will understand.

It seems to me Malaysians all agree on one thing - QUALITY. Of course we can be like Ford, GM and Daimler.

We can borrow billions of dollars and fund our sales, marketing and especially Research and Development departments.

The question is, what will the plan be when things go awry? Will Malaysians agree with a USD 17 billion bailout, just like what the automotive makers in US are enjoying now?

To produce quality cars, it is not that simple. Things do not come right out of textbooks. We have two options actually.

The first option is to spend billions of dollars to acquire the knowledge and technology from the top carmakers (just like how we spent on Lotus and the CamPro Engine). The technology, quality and design of cars are patented. These knowledge and quality can only be acquired at a price. Nothing comes free, right?

The second option is to invest a big sum in the Research and Development department of Proton. That funds have to come from somewhere. The Government is not willing to pump in money. Malaysians, who are always complaining of being poor, are driving Hondas, Toyotas, Mercedes and Beemers.

No one supports Proton. Not even Terengganu, Penang, Perak and Selangor Government officials.

Malaysians want quality cars. But can quality cars come overnight? Yes they can if Proton invests heavily with borrowings and have a safety net if things go bad, just like the Big Three in US.

Unfortunately, money does not fall from the sky in Malaysia for Proton. Only in the United States for the Big Three. Even the Koreans will soon have a bailout too with news of Ssangyong facing financial troubles.

Americans are so different from Malaysians. When their companies fall, Americans scream:

1. Buy American!
2. Save our jobs, save us Americans!

In Malaysia, when our companies fall, many will scream:

1. If we can't compete, shut down!
2. Why save the companies? That's the taxpayers' money!
3. Cronyism (In China it is called guanxi, in US it is called networking - Malaysians call it cronyism)


These words, are only uttered by those unaffected.

Imagine the 100,000 or so people who are affected when companies tumble. They will be jobless and they cannot pay bills, feed their family and pay for medical bills. Malaysians are heartless - at times.

Whatever it is, there are two sides and I have to be fair. Mismanagement in Proton exists, that is for sure.

When Tengku Mahaleel was the CEO, Malaysians see a momentum of car production, quality amd design. We were improving at a desired pace.

Sadly, due to politics, Tengku Mahaleel was directed to the EXIT door. Proton was never the same - with their 1 Euro sale of MV Augusta, poor car sales, heavy losses, the tale of the disappearance of the cash reserves, slow pace in launching new models.

These must be corrected. A proper management of Proton must be in place.

A new Saga was born last year. Soon, we hope to see Proton competing with other carmakers.

A long term plan will be to open their doors and invite Malaysian fresh graduates in automotive engineering from overseas as well as experts to join Proton.

Protecting local graduates is a good thing. But Proton is in need of help. The two options stated above are too expensive to execute. Proton must begin to open up.

Having said these, I must say I am always impressed with Toyota cars. the organization, their business model and their profits. The new Camry is an eye-catching machine.

Perhaps Proton can start knocking on Toyota's doors and negotiate something with them.

Everyone needs friends. So do carmakers. This is the Proton fairytale.


(Credits to Car.com, Wikipedia, Bernama, and The Star for the photos)

6 comments:

vinnan said...

Let me tell you something about Proton and why it deserves to die. About 12 years ago, my brother was servicing a calibration machine at the Proton plant in Shah Alam. While he was on the machine he overheard two Malay engineers talking about the need for non-Malay engineers. To make a long story short the two engineers concurred that there was no need for non-Malays in Proton.

Proton is all about how the Melayus can take on the world without the help of others. It was a Mahathir project to con the Malays into thinking they have the intelligence and technical expertise to take on the world. In this endeavor they have failed miserably. Who the hell do the Mats think they are? Compared to the industrial powerhouses they are totally insignificant. If Proton want the technology of the major car makers then they have to allow these car makers control over their technology. No major car maker in the world is going to accept the UMNO 'Ketuanan Melayu' shit Many Malaysians do not like Proton because we were the ones who ended up paying for the failure of these UMNO Mats in the form of shit quality, old technology, and atrocious service. Yes Malaysian do want cheap and reliable cars not because Malaysians are kedekut but because we know it can be done. The present Proton Saga sedan cost about US 10,000. Look the US and see what the Yanks can get for UNDER US 10,000 then tell me whether Proton is worth saving.

Ahmad Amzar said...

way to go!about the mv augusta,perhaps those ppl up there could form a royal commission on it?..one of my wishes for this year,at least until march la..hehhh

Jared said...

Congrats Wei Liang on your Article being published in The Star!!~ Proud of ya.

Like to add on to what you've said. Another factor to the problem with Proton is their focus of attention. If one observes right, every carmaker has its own niche specialty. Japan's 2 biggest carmakers are Toyota and Honda. Followed by Mitsubishi and Mazda. Toyota is famed for its reliability whereas Honda is popular for its performance. That's why those 2 can make it Big on the international arena. Mitsubishi and Mazda is stuck in between the strategic clock. Therefore, both could not demand such a high global market share.

Now, bring this back to our local car market scene. Perodua made an intelligent move to building what is defined by Tata Motors as Nano subcompact vehicles with its MyVis, Kancils and Kelisas. That is why Perodua has now overtaken Proton as the leading top selling local carmaker. Proton on the other hand has fallen to the category of being stuck in between. They have flops such as, Savvy, Tiara, Juara, etc.

In my opinion, Proton should focus on doing what it does best. Building affordable Sedans. It made a right move to reintroduce the new Saga. It should establish itself as the leader of this category before moving onto other categories. The strategic stretch should only be done once Proton's core competencies are strong enough. Therefore, I have my reservations when Proton announced that they were considering MPVs. Right now, the Saga, Persona and Waja are correct target models, but still not quite there yet. Improve on export sales of these models. Prove them on the international scene first. Because of that, Proton should invest heavily on R&D on improving reliability of its machines as it has been its downfall for years.

river said...

I'd like to reply to Vinnan.
Boy you are sure a malay hater and a dead end pessimist. your brother overhead two malay engineers voicing opinions about the non-malays and suddenly you generalize and condemn everything is the fault of the malays. I too overheard the non-malays uttering despicable opinions about the malays, does that allow me to think negatively about other races? Until all ethnics in this country can learn to respect one another, this include the malays and vice versa, tolerating cultural differences and agree on a common national agenda, we would never see the country prosper at the same level as the Asian leaders. The problem with this country is the existence of extremist minorities in the population like you and the two engineers who could never see the picture from a broader scale. Extremists alike engender degenerative struggles like the communists, hindrafs and the al-maunahs. try to read back your comment and see why i classify you no better then the given examples. i am delighted to see few malaysians like the owner of this blog who can accept differences and agree on positive agendas for the nation. People like you would never see Tun Mahathir's sincerity for his nation despite all his deeds. What's wrong with a nationalist like him striving to motivate his community to excel at par with other communities so that racial and economic differences can be a thing of the past and the people can then unite under one flag and compete with other single ethnic countries. Ironically, his Vision 2020 clearly states this mission, he even cried that he failed to improve the malays before he stepped down. It is not about him championing the malays, it is more about pursuing a greater malaysia without leaving the majority ethnic in the country being left out in the process. Clearly you should rather condemn Sami Vellu for not doing the same for his community, why blame everything on the ex-PM. His intentions were good but the implementation lacked effectiveness, because of extremist skeptics like you and the narrow minded citizens like the two engineers who do not support this long term agenda.
I work in a GLC and there is a fair mix of malays, indians and chinese, and we are the most performing GLC indirectly under the Khazanah stable and we are on track to take the number one spot from a serious private competitor, and it shows that when we put aside our differences, we really can achieve heights. There is no bickering about who deserve what. we work on performance objective and celebrate raya, deepavali and CNY together. there is respect for differences and this is the environment that the country should look forward to create.

The french would never let their peugeot, renault and citroen to be taken over by foreigners. in my humble opinion, with the big car manufacturers facing difficulties due to the economic downturn, this would be the best time Proton can capture the opportunity and emerge as a strong contender in targeted global segments. we need to have a creative and performance-oriented management who can exploit the current situation to recapture fragile markets.

breachno said...

Hi,

Read your post on the Star through Amzar (Hi Amzar :p).

And I wrote about Proton a month ago.
http://phobia-collaboration.blogspot.com/2008/12/should-we-be-happy-or-worried.html

And erm... I'm looking things at the technological side, not the political or any other sides. Because I'm an engineering student myself and I believe that if we work hard or borrow from someone to get money , we can buy and sell things anytime. But I think if we do not have the knowledge and skills, I don't think we can produce good products.

Cheers,

keropok lekor said...

my dad recently changed his old merc for the new Proton Saga. I am impressed with it and enjoyed driving it, second best after our 660cc Kancil.