Nasimuddin Wins Automotive Man Of The Year Award

KUALA LUMPUR, Nov 29 (Bernama) -- Tan Sri S.M. Nasimuddin S.M. Amin, group managing director of the Naza Group of Companies, has been named the Automotive Man of the Year at the NSTP-Ambank Car of The Year Award 2006 Wednesday.

Nasimuddin, who won the same title when the Car of The Award was initiated in 2002, received the title for his outstanding achievement in the Malaysian motor vehicle industry.

Minister of Entrepreneur and Cooperative Development, Datuk Seri Mohd Khaled Nordin, presented the award to Nasimuddin.

Last year's winner was Datuk Frank Steinleitner of Daimler Chrysler Malaysia.

Meanwhile, Honda Malaysia Sdn Bhd has won the overall Car of The Year Award with its Honda Civic 2.0 model which also won the family car category.

-- BERNAMA

Multiple bidders for a deal in Proton

PETALING JAYA: The competition for control over Proton Holdings Bhd's business is heating up.

Homegrown motor giant Naza Group said yesterday that it had, about two or three months ago, submitted a letter of intent to the Government to buy Khazanah Nasional Bhd’s controlling stake in Proton.

Its admission of interest in taking over Proton comes on the heels of DRB-HICOM Bhd expressing similar willingness in taking over control of the national automaker but whether those bids are being considered is another question. Both the companies believe the national carmaker would provide synergy to their respective motor business.

“We are interested in Proton as a whole. We believe we can bring Proton to a different level,” Naza Group chairman and chief executive officer Tan Sri SM Nasimuddin SM Amin said after the launch of Naza Kia and Naza Kia Services 3S Juru branch and the latest entry level Naza Kia product, Naza Suria.

Meanwhile, Bernama yesterday quoted Second Finance Minister Tan Sri Nor Mohamed Yakcop as saying the Government was talking only to Volkswagen AG (VW) of Germany and PSA Peugeot Citroen of France on the possibility of one of them striking up a strategic partnership with Proton.

“We are only talking with them (Peugeot and VW) at the moment,” he said on the sidelines of the Finance Ministry's open house in conjunction with the Deepavali and Hari Raya festivities in Putrajaya.

Nor Mohamed had recently said the decision on Proton's strategic partner would be made within three months.

News reports said VW was interested in taking control of Proton's manufacturing division.

Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir, when asked whether PSA officials were in town, told Bernama a technical team from PSA Peugeot “will be in town to conduct the feasibility study in areas of collaboration as highlighted under a memorandum of understanding.”

Bloomberg, meanwhile, quoted PSA Peugeot spokesman Hugues Dufour as saying the company was in talks with Proton to form a partnership to build and sell cars in South-East Asia and had no plan to take a financial stake in the Malaysian company.

Officials from PSA Peugeot, Europe's second biggest carmaker, were in Malaysia last week working on finalising the agreement and had met government officials, he said, adding that it aimed to complete work on the alliance by year-end.

“These discussions are being held in the framework of the letter of intent we signed and don't include at all taking any financial stake in Proton,” Dufour said.

Alado bringing in 4 new Chery models

BEIJING: Alado Corp Sdn Bhd, the sole importer of Chery vehicles in Malaysia, plans next year to introduce four new models, of which one would be a 1.3-litre model in the QQ range currently being sold in the country, executive chairman Tan Sri Cam Soh Thiam Hong said.

The estimated combined sales of the four models would be 5,500 units, comprising 2,500 completely-built-up (CBU) units and 3,000 completely-knocked-down (CKD) vehicles, he told Malaysian journalists attending the Chery Automobile business conference here.

A Chery multi-purpose vehicle (MPV), V5, would be available in March, while the Chery A1 sedan, Tiggo sport utility vehicle (SUV) and 1.1-litre and 1.3-litre versions of the under RM60,000 QQ6 were expected to be available in June or July.

The SUV and MPV would be priced below RM100,000 and the Chery QQ6, about 30% higher than the 800cc QQ currently sold in Malaysia, Soh said.

The QQ manual transmission is priced at RM39,888 on the road while the automated mechanical transmission (AMT) QQ costs RM42,888. Alado sold more than 100 QQs last year and more than 400 this year, he said.

Soh said with the anticipated higher sales, the company was in discussion with potential partners that had existing after-sales service centres, one of which was Edaran Otomobil Nasional Bhd, to expand its network of service centres from the present 45 to more than 100.

The CBU units would be imported by Alado unit, Alado Bumi Sdn Bhd, while the CKD units would be exported to Indonesia and Thailand, he added.

The models that will make their way to Malaysia next year were showcased at the Beijing Auto Show along with the Eastar bullet-proof car and Chery Tiggo-New Concept Vehicle.

DRB-HICOM: Proton stake offers synergy

SHAH ALAM: DRB-HICOM Bhd says it is keen on a stake in Proton Holdings Bhd because both companies have inter-related businesses.

Chief operating officer Mohd Redza Shah Abdul Wahid said DRB-HICOM unit Edaran Otomobil Nasional Bhd distributed Proton cars and that many of its component companies also supplied parts to the national carmaker.

“DRB-HICOM group, historically, owned a stake in Proton and, therefore, we are interested in the development of Proton. We feel we can assist the Government in the future of Proton,” he said at the DRB-HICOM Hari Raya and Deepavali open house here yesterday.

In reply to a Bursa Malaysia query on Tuesday, DRB-HICOM confirmed reports that it has proposed to buy a stake in Proton. Other companies that have expressed a similar interest are the Mofaz group and Naza group.

On the size of the Proton stake, Redza said the proposal was still at the preliminary stage. “We have stated the number of shares we are interested in (acquiring) but it is best I don’t disclose it now,” he said.

He also said the proposal was DRB-HICOM’s own initiative and that it was not invited by the Government to acquire a stake in Proton.

Redza said DRB-HICOM had “certain ideas on Proton to be shared with the relevant people”.

“It is now in the hands of the Government. They have not given us a time-frame but I believe it is a matter of priority to the Government,” he added.

Commenting on Prime Minister Datuk Seri Abdullah Ahmad Badawi’s recent announcement that the Government might allow foreign companies to own more than 50% of Proton’s manufacturing operations, Redza said DRB-HICOM would not object to Proton getting a foreign partner like Volkwagen AG if it succeeded in taking up a stake in Proton.

He said the group believed the Government was on the right track in looking for a foreign strategic partner.

“It all depends on what's best for the nation,” he added.

DRB-Hicom confirms interest in Proton stake

DRB-Hicom Bhd had recently submitted a proposal to the government indicating its preliminary interest in the possibility and prospects of acquiring a portion of shares in Proton Holdings Bhd, the company said on Nov 14.

Replying to a Bursa Malaysia query on a report in the latest issue of The Edge, DRB-Hicom said it would make the appropriate announcement to Bursa in a timely manner should there be any significant development or agreement on this matter.

The Edge reported that DRB-Hicom was one of the parties that had submitted proposals to take over Proton. In the report, it said Khazanah Nasional Bhd, which owns a 42.7% stake in Proton, could sell down as much as 32% stake in the company.

Prime Minister Datuk Seri Abdullah Ahmad Badawi had said on Nov 9 that the government was considering giving approval for German carmaker Volkswagen AG to take up a 51% controlling stake in Proton's manufacturing operations.

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Proton extends gains on VW prospects

Proton Holdings Bhd’s share price continued to rise in early trade on Nov 10, as investors were upbeat about the prospects of Volkswagen AG (VW) entry into the national carmaker’s manufacturing operations.

It opened at RM5.60, up 10 sen. Within the first hour of trade, there were 321,900 shares done at prices ranging from RM5.60 to RM5.70. At 10am, it was trading at RM5.65, up 15 sen or 2.7%.

The call warrants jumped as much as 28.7% or 12.5 sen to 56 sen. It opened at 45 sen, up 1.5 sen. Within the first 60 minutes of trade, there were 2.13 million units done at prices ranging from 45 sen to 56 sen.

At 10am, it was trading at 54.5 sen, up 11 sen or 25.3%.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said on Nov 9 that the government is considering giving approval for the German carmaker to take up a 51% controlling stake in Proton Holdings Bhd's manufacturing operations.

OSK Investment Research said the move would provide access to world class R&D, especially for developing lower-cost large-volume cars

“In the VW stable, the technological strength is quite impressive, namely Audi and its sports division Quattro Gmbh, Lamborghini and Bugatti, and not to mention that Porsche is a major shareholder of VW.

“We do not doubt that some of this may not filter down to Proton but it good to know that the possibility is there. This is where VW makes a more compelling choice as Proton’s partner and we share the same sentiment with PSA Peugeot Citroen,” it said.

OSK Research said that there could be joint development of new products, which was the cheaper means of producing cars or components.

“Proton would certainly benefit from this as a mean of expanding its product range since these established car makers have a more complete range of vehicles, from a small car to large MPVs and SUVs,” it added.

Proton to stay under government control

SEREMBAN: Proton Holdings Bhd will remain in the Government’s control even if 51% of Proton’s manufacturing division is sold to a strategic partner, said deputy Finance Minister Datuk Dr Awang Adek Hussin.

He said a strategic partnership was important for the national automobile company to ensure it was not excluded from competing internationally, adding that Proton could not depend solely on local sales but also explore the world market.

To achieve this, expertise of international standards and strategic partnership was needed, he added.

“The Government will evaluate and decide what is the best for Proton. We will ensure that the country’s interest in the company is upheld,” he told reporters yesterday after opening the Kolej Tunku Kurshiah co-curriculum awards ceremony.

Second Finance Minister Tan Sri Nor Mohamed Yakcop had announced on Friday that the Government was in talks with Volkswagen AG (VW) on the possibility of teaming up with Proton Holdings Bhd.

Previous reports had said the Government was considering selling a stake in the national carmaker to VW. Another party that the Government was talking to was PSA Peugeot.

Dr Awang Adek added that many parties had shown interest in a strategic partnership with Proton but none were as solid compared to VW.

He declined to reveal the list of local companies who were also competing for a share of the company.

On the 9th Malaysia Plan, he said more than half of the 880 projects had begun with the remainder awaiting the outline and completion of tender.

PM: VW may buy into Proton manufacturing

Prime Minister Datuk Seri Abdullah Ahmad Badawi said on Nov 9 that the government is considering giving approval for German carmaker Volkswagen AG (VW) to take up a 51% controlling stake in Proton Holdings Bhd's manufacturing operations.

“It is an option we are considering at the moment,” he said, adding that a decision would be made after considering the options.

Abdullah was commenting on a report in the FinancialDaily on Nov 9 that the government had finally decided on giving foreign parties 51% control in the manufacturing operations of Proton with Volkswagen as a potential partner.

He was speaking to reporters after launching the Universiti Malaya Royal Professor Ungku Aziz Chair and centre for poverty and development studies in Kuala Lumpur.

Research houses, meanwhile, are considering making an upward re-rating of Proton following the latest government move to consider giving approval to foreign parties to take control of the the manufacturing arm. Proton closed 30 sen higher at RM5.50 after touching a high of RM5.70 with 1.92 million shares done.

On Nov 9, the FinancialDaily reported that the decision to bring in a foreign partner to Proton was made in mid-October at a meeting on the automotive industry chaired by Abdullah.

The report said negotiations had resumed with Volkswagen in October after talks between Proton and the German carmaker failed earlier this year over issues such as control of the national carmaker.

Two senior officials from Volkswagen had met with Second Finance Minister Tan Sri Nor Mohamed Yakcop to discuss the matter including the equity structure, vendor system and product development. Volkswagen is expected to come back with a complete proposal.

The report said the government was agreeable to a model similar to the arrangement adopted by Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Japan’s Daihatsu Motor Co Ltd. Using that arrangement, Proton would retain control over the domestic distribution arm but the manufacturing arm would be headed by a foreign partner.

The report added it was now up to Khazanah Nasional Bhd to decide whether to sell its majority stake in Proton to local players such as Sime Darby Bhd or DRB-Hicom Bhd to drive further negotiation with their respective foreign partners.

A Proton official, when contacted, said the company’s management was unaware and had no knowledge of the government’s decision.

“If there is any decision, it is a shareholder’s matter,” the official said.

OSK Investment Research has upgraded Proton to a 'trading buy' call from neutral with a target price of RM7 per share based on 0.7 times FY08 book value versus 1.0 times for Kia Motor and Hyundai and 0.8 times for PSA Peugeot Citroen.

CIMB Investment Research and Mayban Securities Research said they would revise their fair value and call on Proton if the government approves the sale to Volkswagen.

“Proton could ride on VW’s stronger brand name, access the latter’s far superior technology and benefit from a significantly wider sales and parts sourcing network,” CIMB Research said, adding it valued Proton at 0.9 times CY07 net tangible assets at a target price of RM9.20.

It said such a move would be positive for Proton as Volkswagen would likely use the former’s plant in Tanjung Malim as its production base for the Asean passenger car market.

CIMB Research added Proton would likely develop new car models with Volkswagen for specific segments and markets.

Mayban Research said Volkswagen would be more pliant in negotiations this time around as it could use Proton as a platform to penetrate the Asean market to counter its slower sales recorded in North America and Europe.

Proton needs strong global partner, vendors

Proton Holdings Bhd needs a strong global partner to help it address numerous problems, such as brand perception, and regain market share, its vendors said.

Proton Vendors Association president Dr Wan Mohamed Wan Embong said: “Any development to help find an equity partner or partners is welcomed by our members, but it must be a strategic alliance that would help Proton and not a strategic acquisition.”

He said Volkswagen or any other major carmakers would have superior quality compared with Proton, and the partnership would help the national carmaker to compete effectively in the international market.

“It is better to have a small piece of a large cake than having the entire share of a small cake,” he told FinancialDaily on Nov 9 when asked to comment on the government’s decision to consider giving approval to German carmaker Volkswagen AG to take up a 51% controlling stake in Proton Holdings Bhd's manufacturing operations.

“As far as the vendors are concerned, they should change or be damned. They should change their attitude, accountability and (adopt) a higher standard of quality if they want to compete globally.

Wan Mohamed said the association’s members had no problems with the latest development and would continue to improve quality to meet the demand of the global market.

Meanwhile, UMW Holdings Bhd managing director Datuk Abdul Halim Harun said the government’s decision on Proton would not affect the group’s growth.

“It doesn’t effect our growth; competition is almost everywhere. Even if they (Proton and VW) forge a JV (joint venture), competition is still there,” he said.

However, Abdul Halim said if the deal does go through, it would be good for the country, as it would provide Proton new technology and a new direction.

Proton at 5 1/2-month high on govt nod for sale of 51% ops

Proton Holdings Bhd’s share price surged to a 5 1/2-month high of RM5.70, up 9.6% on Nov 9, as investors were optimistic about its outlook on news the government has approved a plan to allow 51% control of the manufacturing operations to foreign parties.

Proton opened at RM5.35, up 15 sen. Within the first hour of trade there were 899,200 shares done at prices ranging from RM5.35 to RM5.70.

At 10am, it was up 35 sen or 6.7% to RM5.55.

The Edge FinancialDaily reported the government is believed to have finally decided on giving foreign parties 51% control in the national carmaker’s manufacturing operations, with German carmaker Volkswagen AG (VW) being mentioned as a potential partner.

Negotiations have resumed with Volkswagen AG as of last month for it to come into the picture. Proton and the German carmaker ended talks early this year after they failed to agree on issues such as control of the company, a source said.

According to the source, the government is agreeable to a model that would be similar to the arrangement between second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and its principal Daihatsu Motor Co Ltd of Japan.

OSK Investment Research said it had upgraded its call on Proton from “Neutral” to a “Trading Buy” with target price at RM7 per share (based on 0.7 times FY08 book value versus 1.0 times for Kia Motor and Hyundai and 0.8 times for PSA Peugeot Citroen).

“This recent development with VW is certain to provide an impetus for trading on the shares. We expect that the scheme is similar to Daihatsu/Perodua arrangement and VW will assume control of the manufacturing arm.

“As for the equity sale, we believe that Khazanah (Nasional Bhd) would want to keep Proton nationalised. Thus, should they decide to sell, it would most likely to be to a local party(s),” it said.

Govt okays 51% sale of Proton manufacturing

The government is believed to have finally decided on giving foreign parties 51% control in the manufacturing operations of Proton Holdings Bhd, with German carmaker Volkswagen AG being mentioned as a potential partner, a source said.

The source said negotiations have resumed with Volkswagen AG as of last month for it to come into the picture. Proton and the German carmaker ended talks early this year after they failed to agree on issues such as control of the company.

According to the source, the government is agreeable to a model that would be similar to the arrangement between second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and its principal Daihatsu Motor Co Ltd of Japan.

Under this arrangement, the domestic distribution arm will remain in Proton’s domain but the manufacturing arm will be headed by the foreign partner, which will bring in technical expertise and help expand Proton’s production for export.



It is learnt that the government reached its decision in mid-October during a closed-door meeting on the automotive industry chaired by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

The meeting was attended by several ministers and representatives from the Economic Planning Unit and Bank Negara Malaysia.

Shortly after that, two senior officials from Volkswagen AG met up with Second Finance Minister Tan Sri Nor Mohamed Yakcop in Putrajaya to look into the matter. At the top of the agenda during the discussion were the equity structure, the vendor system and product development.

Volkswagen AG is expected to come back with a complete proposal regarding its participation in Proton, the source said.

The government’s latest stance has opened up more space for renegotiation with Volkswagen, or any other foreign carmakers, to become Proton’s partner.

“The latest development is critical to remove the current deadlock in the local automotive industry. Parts and component makers that supply to Proton have been suffering because of Proton’s declining production volume. You cannot solve the industry problems unless you solve Proton’s problem,” said a source.

It is learnt that Proton has halved its production volume to about 5,000 units a month for November and December given its huge stockpiles of unsold inventories that have to be cleared by year-end.

Lower production from Proton means fewer jobs for its parts and components suppliers.

“The slower the government acts on it, the more serious the problems could become. The vendors industry cannot wait further and they need a workable solution for Proton,” said the source.

He said the industry is getting impatient with the numerous memorandums of understanding (MOUs) that Proton has signed in recent months with French carmaker PSA Peugeot Citroen, Mitsubishi Motors Corp, Chery Automobile and others.

“Pending finalisation, the scope of the potential collaborations under the MOUs does not offer a complete solution to Proton’s problem in the longer term,” he added.

HLG Research, in a recent report on Proton, said: “The preferred, and in our opinion the choice option, is foreign equity participation with management control at Proton Holdings level. This enables the foreign party to steer and drive the necessary changes to improve Proton’s uncertain outlook.”

However, given the potential political backlash of giving Proton’s control in whole to a foreign partner, a Perodua model is a more sensible option for the government to be agreeable to.

With the government having made up its mind, it is now up to Khazanah Nasional Bhd to decide whether to sell its majority stake in Proton to private sector enterprises, such as Sime Darby Bhd or DRB-Hicom Bhd, to drive further negotiation with their respective foreign partners.

On Nov 8, Proton’s share price soared more than 11% or 54 sen to RM5.20 with 2.2 million shares done after talk resurfaced of a possible takeover of the national carmaker by the government or the entry of a new shareholder.

Meanwhile, speculation is rife that former Perodua managing director Tan Sri Abdul Rahman Omar will be appointed as Proton’s chairman to replace Datuk Mohd Azlan Hashim. When contacted, Abdul Rahman said he was unaware of such an appointment.