State-controlled car maker Proton Holdings on Tuesday reported a second straight quarterly loss on Tuesday, stung by its investment in an Italian motorbike firm, and poached a new boss from a rival.
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Proton, whose domestic market share has been shrinking as competition heats up, reported a net loss of 154.3 m ringgit (US$40.8m) for the second quarter ended 30 September 30, hurt by bad-debt charges related to Italian unit MV Agusta, Reuters reported.
“From the financial perspective, clearly the investment has not met expectations,” chairman Azlan Hashim told the news agency.
“We are currently taking a long, hard look on this investment to see whether or not we should continue to be invested in this company. Our core activity is car manufacturing,” he reportedly added.
Reuters noted that Proton rescued Agusta a year ago by pumping EUR70m into the struggling firm, allowing it to pay off its debts, but the move into motorbikes surprised investors. Proton says it has now written off the value of its 57.5% stake in Agusta.
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By GlobalDataThe firm has seen its share of Southeast Asia’s biggest passenger car market fall from a high point of nearly two-thirds to about 40% and it also lost chief executive Tengku Mahaleel Tengku Ariff in July and then its finance chief in August.
On Tuesday, Reuters said, it named Syed Zainal Abidin Tahir, 43, to succeed Tengku Mahaleel, giving him the title of managing director – he is currently executive director of the manufacturing arm of rival Malaysian car-maker Perodua, which is part-owned by Daihatsu.
Given its travails, Proton stock’s main attraction this year has been the talk of a takeover by Germany’s Volkswagen AG, Reuters added. The pair agreed in October 2004 to look at Proton’s assembling Volkswagen cars for sale in Southeast Asia’s free-trade area.
But Proton’s Azlan raised the prospect on Tuesday that the two companies might not reach a deal after all, the report said.
“We are waiting for their response,” he said when asked for an update on talks with Volkswagen. “We asked them to come back as quickly as possible, so that we can bring the whole matter to an end. If we can, we will. If we can’t, perhaps we agree to discontinue the discussion,” he told Reuters.
Rival UMW Holdings, which sells Toyota and Perodua cars in Malaysia, reported on Monday a 38% jump in nine-month sales of these brands from a year ago, a gain, brokers told the news agency, that reflected Proton’s waning domestic market share.
