Business Commentary

Proton now part of global auto group

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Written by Syndicated News

KUALA LUMPUR, March 11 2018 : Zhejiang Geely Holdings Group’s purchase of a stake in Proton Holdings Bhd is proving to be highly positive as the national car manufacturer will now be able to tap into advanced auto technology given the Chinese group’s acquisition of Mercedes Benz owner Daimler AG just last month.

There is now the looming prospect of sharing electrical car technologies since Proton has become part of a potentially lucrative and technologically-advanced auto group.

This includes international brands such as Daimler, Mercedes Benz, Volvo cars and trucks,  Lotus as well as London Taxi Cabs.

Geely bought Daimler as it is racing to build electric cars to meet tough Chinese emission standards and produce energy-efficient cars.

And what better way to raise efficiency and produce electric cars than to acquire renowned car makers which are already doing it.

Geely strongly believes that modern technology will propel the group to evolve into a technological giant at par with Google, Uber and set the stage for it to emerge as a technologically  advanced technological vehicle manufacturer.

With such technologies, the Chinese company can give other car manufacturers a run for their money.

It is clear therefore that the earnest desire to own such advanced automobile technologies has led them to buy and own Mercedes Benz.

As for the purchase of Volvo by Geely in 2010, it is proof of Geely’s ability to turn around the renowned but ailing Swedish auto manufacturer.

Having observed Volvo’s evolution and a development as a carmaker since the early days, an auto analyst remarked that modern-day Volvo cars have never been sexier, thanks to Geely’s input.

Against such a backdrop, the surprise question is why they also chose to acquire a 49.9 per cent stake in Proton.

While other potential buyers might have missed it, Geely must have sensed the strategic importance and potential of acquiring Malaysia’s national car maker.

They must have done their homework and they would not have gone into any auto deal blindly.

Therefore, who are we to question if a company that purchased Swedish automaker Volvo, bought shares in Mercedes Benz, and LEVC, the maker of London’s black cabs, due to their strategic importance, also has similar faith in Proton.

This only serves to reinforce Geely as an ambitious, professional and global automobile group with the foresight to acquire Proton with a firm belief that it will be able to generate handsome profits in time to come.

Given their global presence and success in turning around ailing auto giants, Malaysians should not be too critical or negative about the way the company is operating to put the company back on the path to profitability.

Analysts say outsiders seem to have more faith in Proton that Malaysians themselves, which is why Geely should be given a chance to prove itself with Proton.

We must bear in mind that the Proton plant in Tanjung Malim is currently manufacturing under capacity.

Geely is targeting to ramp up production to a whopping 400,000 cars in 10 years to penetrate the domestic, regional and global markets.

Given this targeted growth, coupled with the evolution of the global car industry, it is crucial for Proton’s ecosystem and infrastructure, including vendors, to support this endeavour.

Otherwise, Proton will be left further behind as what is happening now.

For the Tanjung Malim plant to be producing under-capacity is a sheer waste of its resources and production capacity.

Therefore, it didn’t come as a surprise when among the first thing that Geely did after acquiring its stake in Proton was to find the cause of the “wastage” although they knew the plant has a huge potential.

A crucial prerequisite to enable Proton to achieve a production capacity of 400,000 or even a million units is that it needs to have markets.

Although relatively a new company, Geely is not a novice when it comes to marketing experience and new ideas.

It is clear to see how aggressive it is in the global automotive industry to the extent that even Mercedes Benz and Daimler AG were taken aback.

Geely knows exactly what it is doing.

Bumiputera vendors, salespersons as well service centre operators should take cognizance of the intense competition in the global automotive industry.

It is imperative that they upgrade to sales, service, spare parts and spray painting (4S) service centres so as to benefit from Geely’s endeavour to create the infrastructure for the supply of competitively-priced auto components.

Along the way, these vendors would benefit from Proton raising its manufacturing capacity to 400,00 cars and going regional as the potential is clearly there.

Proton could very well benefit from any apparent transfer of technological expertise from the renowned car makers within the Geely group such as Daimler and Volvo,

They should appreciate and support what China’s Geely is doing, which is to make Proton a highly-successful global brand and put the national car manufacturer back on the global grid.  – Bernama

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