Progressing Proton

Prime Minister Dato’ Sri Mohd. Najib Tun Razak should be lauded for the rescue package offered in the form of RM1.5 billion soft loan, to ensure Proton continue to be a national industrial asset producer.

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Recommended by Govt approves RM1.5 billion soft loan for Proton to pay vendors

BY KOI KYE LEE – 8 APRIL 2016 @ 2:25 PM

KUALA LUMPUR: The government has approved Proton Holdings Bhd’s application for a soft loan of RM1.5 billion, subject to several conditions which must be met by the national carmaker.

The loan, said International Trade and Industries Minister Datuk Seri Mustapa Mohamed, is geared towards helping the national automotive company to pay vendors for components supplied.

Among the conditions for the loan, he said, were that Proton must convince the government of its new business model, to come up with a turnaround plan for the company, aside from providing a strategic plan to expand the domestic and international markets.

Mustapa said: “A special task force will also be set up and it will be led by Pemandu chief executive Datuk Seri Idris Jala. This team will overlook Proton’s transformation plan and to ensure that it is successful.”

The special task force will be made up of six representatives — three from the public sector namely the Finance Ministry, International Trade and Industries Ministry, Economic Planning Unit (EPU) while the remaining three are from the private sector which will be identified at a later date.

The minister also said the government was aware that the automotive industry was a strategic industry and that there are 12,000 workers directly under Proton while approximately 50,000 were with the vendor companies.

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We advocated that Malaysian Government should continue support Proton upon the resignation of Chairman of BoD Proton a week ago.

It is a good opportunity for Proton to clean their own act, which also include re-strategising their policy, relationship and operation with regards to the near 300 Malaysian vendors.

It is believed that many of the same vendors are also doing business with Perodua but the treatment and relationship is completely different.

Minister of international Trade and Industry Dato’ Seri Mustapha Mohamad already issued a statement of the Government expectation of a new Proton business model.

Proton has been seeking funding from the Malaysian Government for a while now:

Sun Daily:

Proton sought funding from Miti, minister confirms


Wednesday March 5, 2014
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KUALA LUMPUR, March 5 — National carmaker Proton Holdings approached Putrajaya for funds, Datuk Seri Mustapha Mohamed confirmed today but said the practice was not unusual among local firms.

The minister of international trade and industry declined, however, to divulge the purpose of the funds being sought by the struggling automaker, other than to say Putrajaya provides various forms of allocations to help local companies grow, including tax breaks, research and development grants, and training incentives.

“Of course companies come for incentives especially Proton. We do give R&D grants, training grants,” the minister told reporters at his office here.

Mustapha said all such applications were screened and no preferential treatment will be given.

“The approval will be based on two things. One is the availability of funds; second is the cost benefit analysis. That is applicable to any application, not just Proton,” he said.

Earlier today, English daily The Star reported that Proton is trying to source as much as RM3 billion from Putrajaya and other sources in order for it to develop new models for the market.

According to the report, Proton had approached Miti last year to help fund its model development but came away empty handed after failing to convince its officials. It then turned to national oil firm Petronas but was similarly unsuccessful.

The firm is said to require some RM3.8 billion in investments by 2017 and at least RM1.8 billion by next year.

During its heydays in the 1990s, Proton accounted for nearly four of every five new vehicles sold, but has since witnessed its fortunes dwindle before being overtaken by second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) as the best-selling brand in Malaysia.

Proton was established in 1983 by former prime minister Tun Dr Mahathir Mohamad in his bid to jumpstart Malaysia’s shift towards manufacturing.

In 2012, it was sold to Tan Sri Syed Mokhtar al-Bukhary’s DRB-Hicom.

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Proton should seriously look into production, distribution and marketing efficiency and optimisation, maximising capacity and capitalising on the DRB-Hicom Group strength.

Proton already producing world class cars in the B and C segments. Weak production planning, product positioning and marketing are some of the excuses been talked about for the said products failure to capture and be positioned in the targeted market.

The strategy should also include to ensure the sustainability of Proton, to continue in production of Malaysian designed and made cars.

It is also a good start for a new management headed by Proton CEO Dato Ahmad Fuaad Kenali and DRB-Hicom Group MD Dato’ Seri Syed Faisal Albar.

*Updated 1900hrs

Published in: on April 8, 2016 at 17:00  Comments (5)