Govt has no intention to sell equity in Proton

KUALA LUMPUR (March 29, 2010):

THE government has no intention to sell its equity in Proton to any foreign companies because it does not want a possibility for the local company to be controlled by a foreigner, the Dewan Rakyat heard today.

Chor Chee Heung

However, Deputy Finance Minister Datuk Chor Chee Heung said, discussions have always been held between the government, through Khazanah Nasional, and foreign companies.

"The discussions were on joint-ventures like in contract assembly or to come out with technical products which can be installed in Proton cars or to upgrade Proton cars or their parts so that they could achieve a higher standard," he said when replying to a supplementary question from Datuk Ismail Kasim (BN-Arau).

"Among the companies that we have talked to were Volkswagen, Renault, and Mitsubishi. Another benefit from the discussions is, at the same time, we could expand our market overseas."

Ismail said the government does not need to support Proton financially as it should be able to stand on its own.

"At the preliminary stage, we could understand that the government needed to ensure a smooth financial management, continue monitoring or to have government-to-government arrangements," he said.

"But we don’t see any value-added initiatives in Proton. Just compare it to Perodua ... a big adifference."

He said it could be a burden on the part of the government in developing the automotive industry.

Earlier, replying to the original question from Azmin Ali (PKR-Gombak), Chor said strategic partnerships with foreign companies would enable Proton to become more competitive at the domestic and international levels.

"Any discussions on foreign equity participation in future must focus on a win-win situation by taking into consideration the interest of the country’s automotive eco-system and the need to retain the Proton brand name," he said.

To Azmin’s question on whether the government will continue injecting funds in Proton in the name of protectionism or nationalism although it does not contribute to the country’s income, Chor said he should look at Proton’s original objective.

"If we don’t come out with our own car under Proton, I believe many of the Malaysians today, especially those in the lower income group, would not be able to possess a car," he said.

"So, while we hope Proton would achieve higher success or make bigger profits in future, in terms of socio-economy, the company has succeeded."

By Husna Yusop and by Hemananthani Sivanandam
Source -- theSun