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.

NST story:

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
08:30 PM GMT+8

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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)  

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5 CommentsLeave a comment

  1. Hmmm.. a committee/ task force will be set up with the same people with big tembolok… semua cari makan type

  2. proton is a business concern that is currently providing circa 60,000 jobs ( 12,000 employees of Proton and 50,000 workers employed by its vendors) certainly deserves the help from the gomen.

    even 1mdb was granted a soft loan of RM1 bil just to pay overdue hutang bank.
    And for goodness sake, we dont even know how many jobs exacly 1mdb has created to justify such help from the gomen. .
    I think their workforce is not even 5% of proton direct employee to start with.

    • Thank you.

      Please don’t compare. First of all, 1MDB repaid the soft loan of RM1b within the year.

      Secondly, The two 1MDB mega projects (TRX and Bandar Malaysia) is set to brought forth RM200billion in gross development value, within the next 20 years time.

      Products which Proton produce is subjected to market competition and not able to have exponential value

      Thirdly, strategic investment corporation is designed to bring about strategic returns via value creation. A manufacturing concern is very operational.

      It is like comparing a bakery and property developer.

  3. BD,

    Nampaknya Proton pun dah jadi Pemakan Dedak.

    Bila agaknya Tun M nak bahasakan Proton lak, kerana makan dedak……

  4. […] The partnership with a credible foreign partner was a condition as per announced by MITI Minister Dato’ Seri Mustapha Mohamad slightly over a year ago on the RM1.5 billion rescue plan for Proton. […]

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