Blog: Dave LeggettProton in a bind

Dave Leggett | 21 October 2005

Malaysia’s Proton is a company not in the best of health. It is steadily losing market share at home as a high degree of protection from competition is being eroded under the freeing up of trade rules in the ASEAN region. Overseas sales are not too hot either. Proton is losing money by the bucket-load. Even the somewhat nationalistically inclined Dr Mahathir has had to concede that a tie-up with a partner makes sense, as indeed it does for Proton: come on in and bring your cheque book with you!

But if you were at Volkswagen, you’d perhaps be reluctant to take a big stake in a screwed up company like Proton with its strange history and political baggage, even though there could be benefits to be had from exploiting some of Proton’s under-utilised manufacturing capacity. ‘Let’s keep our exposure down, let’s not get entangled and let’s enjoy some easy short-term gains – it’s a (capacity) buyer’s market. And let’s take it from there.’ Well, that's what I would be thinking.

And the latest government policy initiative? The tone sounds desperate to me and there are still some breaks for national makers that appear more than a little dubious.  

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