Proton Holdings Bhd must not leave its vendors out in the cold if the national carmaker decides to tie up with a foreign company, Dr Mahathir Mohamad said.
The former Proton adviser said disregarding the current Proton vendors would make it difficult for local manufacturers to compete.
“We worry that they will be cut off as suppliers and their businesses will fold and then we will see a drop in the number of local automotive engineering companies,” he told FMT when met at a function last night.
Last month, Proton CEO Ahmad Fuaad Mohd Kenali said he would announce a tie-up with a foreign strategic partner (FSP) in April.
It was later reported that Chinese car manufacturer Geely Automobile Holdings Ltd was the frontrunner for the partnership, which will see the chosen FSP securing a 51% stake.
Geely, which only produced its first car in 1998, has undergone massive changes over the years and even purchased Volvo Cars from Ford in 2010, as well as the London Taxi Company.
Mahathir, who is dubbed the “Father of Proton”, said on a personal level, he was open to the idea of Proton selling some of its stake but would object if the entire company was sold off to a foreign company.
“Proton is a national car. If we allow other companies to use our facilities to produce their cars, we will bear the losses,” the former prime minister said.
Speculation about Geely being the favourite to tie up with Proton has even had positive impact on Proton’s parent company, DRB-Hicom.
Last week, Reuters reported DRB-Hicom’s share price as having gone up by about 10% in a matter of days after local media had mentioned that Geely was the frontrunner for the partnership.
In September, DRB-Hicom said it was looking at five proposals from foreign bidders but declined to name them.
Reuters had previously reported that aside from Geely, Peugeot-maker PSA, Japan’s Suzuki Motor Corp and French carmaker Renault SA had also signalled interest in the partnership.
In April last year, the government gave Proton RM1.5 billion in financial aid on condition that it implements a turnaround plan and finds a foreign partner to assist in research and development.
Source : Adam Abu Bakar @ FMT Online