21-06-2007: PM: Proton-VW talks going on well

Proton Holdings Bhd will implement an integrated initiative under a business turnaround plan in a move to revive its business, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

In a written reply to Teresa Kok (DAP-Seputeh), Abdullah said the plan will involve sales and marketing, efficiency in manufacturing processes, procurement, quality and reducing production cost.

Abdullah, who is also the Finance Minister, said that in the event Proton fails to gain a foreign partner, the national car manufacturer's shareholders will have to make the appropriate decisions and take the necessary steps to ensure Proton continues its role within the National Automotive Policy.

Kok had asked on the status of negotiations between Proton and its potential foreign partners and what the obstacles were to concluding the negotiations.

"What will be the Proton revival scheme and will the government inject new funds into the government-linked company in the event it fails to obtain the necessary funds from a foreign partner," she asked.

Abdullah added that the negotiations involving the shareholders of Proton, which include the government, with Volkswagen AG (VW) and General Motors were revived when no final decision was forthcoming by end-March this year. The government had imposed an end-March deadline to forge an alliance between Proton and a foreign partner.

"The negotiations are going on well and there is no obvious obstacle to bar the continued negotiations between both parties at the moment," Abdullah said.

Officials from the Prime Minister's office, the finance ministry and Khazanah Nasional Bhd have met with officials from VW twice in the last few weeks. It is understood that talks are progressing well. The other potential foreign partner the government has named is General Motors. Khazanah has a 42.7% stake in Proton.

Meanwhile, Bloomberg quoted Deputy Prime Minister Datuk Seri Najib Razak confirming that VW wants a "substantial" stake in Proton. It was reported that the government has "ruled out" selling its entire stake in Proton to VW, thus raising concern that disagreements over control will threaten alliance talks.

"It's the national car," Najib said in the interview with Bloomberg. "it can't be all of the stake."

"The only thing I'm afraid of is this government will get emotional with this," said Nordin Mohd Nasir, an analyst at Inter-Pacific Securities with a "trading buy" on Proton. "Proton doesn't have much to offer. It is still not visible when they will come up with this agreement."

Andreas Meurer, a spokesman for Wolfsburg, Germany-based VW said talks are continuing and declined to comment further. VW is Europe's biggest carmaker.

Najib declined to say if acquisition talks are limited to Proton's manufacturing facilities or to name other possible partners because talks haven't ended. Offers and counter-offers have been "bandied about" and negotiating positions are always changing, he said.

"Whether we can give up a substantial stake, that's the question," Najib said. "Substantial means majority. Are we willing to give up a majority in the manufacturing side?"

Proton last month reported a loss of RM591.4 million for the 12 months ended March 31 2007.

Najib said the government is prepared to let a foreign partner run Proton without political interference. The government also hasn't "closed the door" to companies other than VW, he said.

Govt won’t sell entire Proton stake to VW

PUTRAJAYA: The Government, seeking a partner for Proton Holdings Bhd, ruled out selling its entire 43% stake to Volkswagen AG.

Volkswagen, the Government’s preferred partner for unprofitable Proton, wants a “substantial” stake in the carmaker, Deputy Prime Minister Datuk Seri Najib Tun Razak said in an interview.

“It’s the national car,” Najib said. “It can’t be all of the stake.”

Proton needs a partner after losing half its market share to competitors and posting its first annual loss in at least 17 years.

Control of an alliance may be key for Volkswagen, which would gain access to South-East Asia’s largest car market.

Volkswagen possibly wants a stake in the manufacturing division, Najib said.

Andreas Meurer, a spokesman for Volkswagen, said talks were continuing and declined to comment further.

Volkswagen is Europe’s biggest carmaker.

Najib declined to say if acquisition talks were limited to Proton’s manufacturing facilities or to name other possible partners because talks had not ended.

Offers and counter offers had been “bandied about” and negotiating positions were always changing, he said.

“Whether we can give up a substantial stake, that’s the question,” Najib said. “Substantial means majority. Are we willing to give up a majority in the manufacturing side?”

Najib said the Government was prepared to let a foreign partner run Proton without political interference. The Government also hadn’t “closed the door” to companies other than Volkswagen, he said. – Bloomberg

'Positive News' On Proton-VW Tie-Up Can Be Expected In June - Nor

KUALA LUMPUR, June 13 (Bernama) -- Some positive news can be expected later this month on negotiations for Volkswagen AG to become national carmaker Proton's strategic partner, Second Finance Minister Tan Sri Nor Mohamed Yakcop said tonight.

The government, according to him, is hopeful that the second round of talks between the two parties will be successful as the earlier round in New York had shown positive signs.

"InsyaAllah, we hope the discussions with Volkwagen now entering its second stage will be successful and we will in a short time be able to say something on the progress of the talks," he said during an hour-long live interview over RTM1.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday Proton and Volkwagen are expected to have a second round of talks soon in Bangkok.

Nor Mohamed clarified that he was not involved in the first round of talks between the two carmakers in New York although he was also in that city at the same time.

"I was there to meet rating agencies and investors... I did not meet Volkswagen, others did," he said.

On Proton and General Motors having a possible partnership, Nor Mohamed said that remains "on the table," but said he is unable to shed light on it.

-- BERNAMA

13-06-07: PM: Proton-VW talks positive

Another round of talks between the government and Volkswagen AG of Germany on a tie-up with Proton Holdings Bhd will be held in Bangkok “soon”, Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday.

It is believed that details of a possible merger between the two companies will be fine-tuned then.

Abdullah described the New York talks as “positive” but declined to elaborate, when commenting to reporters on the latest developments concerning negotiations with VW.

According to those close to the negotiations, the New York talks were “positive” in that there were only a few areas where accord was not reached.

The Edge Financial Daily reported last Thursday that high-level talks between VW and Proton were held in New York.

It was reported that talks were at the final stage and that Sime Darby Bhd may take over Khazanah Nasional Bhd’s stake in Proton. It is believed that the same parties would meet in Bangkok.

However, a VW spokesman had denied The Edge Financial Daily report to Bloomberg. “This report is definitely wrong and only rumour without substance,” Andreas Meurer, VW’s Germany-based spokesman had said in a phone interview with Bloomberg last week. “We will have a round of talks soon,” he was quoted further.

It is understood that the Malaysian side was represented at the New York negotiations by representatives from the Prime Minister’s department, Khazanah and Sime Darby.

Sources close to the government had indicated that Sime Darby may take over Khazanah’s 42.7% stake in Proton if “the need arises”.

It had been earlier speculated in a foreign press report that Sime Darby’s chief executive Datuk Ahmad Zubir Murshid may have played a facilitating role in the New York talks.

According to sources, the details of the deal are “not far off” from what has been bandied around for the last two-and-a-half years.

“VW’s plan to take a 51% stake in a new company in which will be housed key Proton assets has not changed over the last two years,” said a source.

The VW plan as announced was to acquire Proton’s manufacturing, research & development and engineering divisions, including its loss-making UK subsidiary, Lotus.

VW had also indicated earlier that the cars it manufactures with Proton in Malaysia would be for both the domestic and regional markets initially, where it would be marketed as Protons.

VW’s plans include using Malaysian vendors and parts manufacturers, in an approach not dissimilar to the model it used when taking over Skoda of then Czechoslovakia.

Meanwhile, it is believed that the plan for Sime Darby to take over Khazanah’s block is also a rehashed version of an original plan submitted last year.

One source said: “Sime’s Proton plan was the first on the table, even before the Naza Group’s and DRB Hicom Bhd’s. However, they withdrew their proposals late last year.”

It is believed that Sime Darby withdrew its proposal when it was decided that Khazanah should remain Proton’s local owner and work with the foreign partner.

Proton fell 15 sen to RM6.10 yesterday.

Proton-VW talks fruitful

BANGI: Discussions in New York last week with Germany’s Volkswagen AG on a rescue plan for ailing national carmaker Proton Holdings Bhd have been fruitful.

Datuk Seri Abdullah Ahmad Badawi said he was told that a second round of discussions would be held in Bangkok.

The Prime Minister said he was told that the outcome of the talks in New York was positive.

“The fact that they want to have another round of discussions means that both sides are happy with the first results.

“Both sides are in positive mood,” he said when commenting on the latest developments on Proton’s discussions with Volkswagen.

He was speaking to reporters after opening the National Convention of Imams at Universiti Kebangsaan Malaysia here yesterday.

However, Abdullah declined to elaborate on the discussions, saying that he was in no position to give details.

The discussions between Proton and Volkwagen were meant to give a clearer direction for Proton, which posted a net loss of RM591.36mil for the year ended March 31, 2007, versus a net profit of RM46.69mil the previous year.

Analysts had repeatedly said that Proton, whose cash pile is depleting, needed a strategic foreign alliance soon for the company to return to profitability.

Rundingan strategik Proton, VW

KUALA LUMPUR 9 Jun – Rundingan yang sedang berjalan antara Proton Holdings Bhd. (Proton) dengan Volkswagen AG (VW) dari Jerman di New York berhubung kerjasama mereka kini menarik perhatian banyak pihak dalam industri automotif dari dalam dan luar negara.

Anda mungkin bertanya: ‘‘Orang Malaysia dan Jerman berbincang mengenai nasib syarikat kereta nasional kita di Amerika Syarikat (AS)?’’

Anda juga mungkin hairan: “Mengapa rundingan tersebut tidak dibuat di Tanjung Malim atau Jerman, mengapa Amerika Syarikat yang di luar peta?’’

Pegawai Proton menjelaskan bahawa rundingan itu diadakan jauh di luar negara kerana para perwakilan Proton dan Khazanah Nasional Bhd. dan wakil kerajaan Malaysia adalah satu strategi dan perlukan ketenangan kerana rundingan dengan VW kali ini melibatkan banyak perkara yang ‘sensitif’.

Malahan rundingan itu sengaja diadakan serentak dengan kehadiran Menteri Kewangan Kedua, Tan Sri Nor Mohamed Yakcop dan delegasinya yang sedang melawat New York sekarang bagi mengelakkan para perwakilan Proton yang terlibat dalam rundingan itu terganggu dengan sebarang spekulasi. Mungkinkah?

Khazanah, yang merupakan sayap pelaburan kerajaan Malaysia selaku pemegang saham terbesar dalam Proton sebanyak kira-kira 43 peratus perlu memainkan peranan dengan begitu teliti dalam rundingan dengan VW.

Ini bagi memastikan identiti Proton sebagai syarikat kereta nasional tetap terpelihara dalam mencari rakan strategik yang boleh membawa `nafas’ baru kepada syarikat kereta nasional itu yang sedang berhadapan dengan masalah kerugian besar.

Pegawai Proton menjelaskan memang sukar mencari kaedah penyelesaian terbaik kepada masalah Proton sekarang kerana tiada sesiapa pun mahu melabur dalam sesebuah entiti sekadar menjadi pemegang saham minoriti, lebih-lebih lagi dalam keadaan Proton berdepan dengan masalah kerugian.

Sedangkan pihak yang bakal menjadi rakan strategik terutama VW dalam konteks ini terpaksa membuat pengorbanan besar mempertaruhkan teknologi dan inovasinya dalam model-model kereta berkualiti tinggi buatan syarikat kereta dari Jerman itu, yang tinggi harganya.

Malahan faktor itu dikatakan menjadi penyebab utama `tumbangnya’ rundingan usahasama dengan syarikat pengeluar kenderaan Perancis, Peugeot S.A sebelum ini dan juga dikatakan punca VW sebelum ini keberatan meneruskan rundingan pada Mac lalu.

Kerajaan Malaysia telah mula mencari rakan strategik untuk Proton sejak usahasamanya dengan Mitsubishi Motors Co. tamat pada tahun 2004.

Sejak itu, beberapa siri perjanjian persefahaman dijalin oleh pengurusan baru Proton bagi menyelidik kemungkinan mengadakan usahasama dengan Peugeot dan Chery dari China, bagaimanapun semua usaha itu menemui jalan buntu.

Berdasarkan `teori’, Proton berunding dengan VW untuk mencipta perkongsian strategik iaitu pengeluar kereta Jerman itu akan memindahkan teknologi automotif dan membantunya mengeluarkan model baru bagi pasaran eksport, tetapi dari segi realiti banyak perkara perlu dihalusi oleh kedua-dua pihak sebelum mereka boleh mencapai sebarang keputusan muktamad.

Di pihak VW, tarikan utamanya terhadap Proton ialah kemudahan kilang pembuatan kereta canggih miliknya di Tanjung Malim yang boleh membantunya mengeluarkan kereta sedan berenjin saiz kecil pada kos yang rendah di Malaysia untuk pasaran rantau sebelah sini.

Semua pihak bersetuju malahan Penasihat Proton, Tun Dr. Mahathir Mohamad bersetuju pakatan strategik adalah penyelesaian kepada masalah dihadapi Proton pada masa ini.

Keadaan tiba ke tahap membimbangkan apabila Proton terus-menerus mencatat kerugian dalam prestasi kewangan tahunannya pada bulan lalu dengan mengalami kerugian besar sebanyak RM619.9 juta.

Ia mendorong Perdana Menteri, Datuk Seri Abdullah Ahmad Badawi pada 31 Mei lalu, menggesa Proton melakukan apa sahaja bagi kembali membuat untung termasuk mencari calon rakan kongsi yang baru.

Dalam konteks ini, ia sekali gus menjadi titik tolak kepada Khazanah untuk melonggarkan sedikit ketegasannya daripada segi pembahagian ekuiti dengan pihak yang berminat menjadi rakan kongsi Proton termasuk VW.

Selain VW, beberapa syarikat automotif tempatan termasuk Kumpulan Naza, DRB-Hicom dan Kumpulan Mofaz menunjukkan minat mengadakan pakat strategik dengan Proton yang memasang Honda dan Suzuki.

“Kita memerlukan pakatan strategik,’’ kata Pengarah Urusan Khazanah, Datuk Azman Mokhtar sebagai tanda bersedia berunding dan mengurangkan tekanan kepada pihak yang berminat menjadi rakan kongsi Proton.

“Kami bersedia mengkaji daripada aspek kawalan terhadap bahagian tertentu perniagaan. Ia mungkin tidak disukai tetapi mungkin wajar, misalnya dalam bidang perkilangan,’’ tambah beliau.

Kebimbangan Khazanah ini bukannya tidak berasas kerana kawalan asing terhadap Proton dikhuatiri boleh menjejaskan identiti Proton yang ditubuhkan pada 1983 oleh Dr. Mahathir yang ketika itu merupakan Perdana Menteri keempat negara.

Matlamat penubuhan Proton ialah bukan sahaja memberi peluang kepada semua rakyat jelata mampu memiliki kereta nasional tetapi juga memacu ekonomi negara ke tahap negara perindustrian.

Malangnya, masalah yang membelenggu Proton ialah daripada segi kualiti pembikinannya menyebabkan ia sukar mempertahankan pengguna setia selain ketiadaan model baru yang segar dan memenuhi selera ramai.

Kualiti kereta Proton yang rendah boleh dianggap antara penyebab penjualannya jatuh sebanyak 40 peratus daripada 183,824 unit kepada 110,358 unit tahun 2006 yang disebabkan persekitaran pasaran yang lebih kompetitif.

Lebih memburukkan keadaan ialah aliran tunainya yang pernah berdiri megah pada RM3 bilion, hari ini menyusut kepada RM461 juta sahaja.

Maka rundingan dengan VW memang menjadi tumpuan ramai kerana semua pihak yang berkepentingan dalam Proton dan rakyat Malaysia menunggu hasil rundingan itu.

Jika rundingan dengan VW gagal sekalipun, semua pihak berharap dalam tempoh tiga bulan lagi Proton tetap tidak ada pilihan, perlu memuktamadkan siapa bakal rakan strategiknya.

Porsche officially files for takeover bid of VW

Reuters is reporting that today, Porsche has politely asked the European Commission if it can take over Volkswagen. The short filing by Reuters goes on to state that the Commission has until July 2nd to either give the green light or look into the matter further. Naturally, we'd expect the E.C. to take its time on the matter. Porsche's ultimate plan appears to involve taking over Volkswagen without being forced to buy all of its shares. A 47-year-old German law currently prevents a Volkswagen takeover, but the European Union is reportedly considering a repeal that would open the door for Porsche to make its move.

[Source: Reuters]

Strategic Partner For Proton Must Accept The Ground Rules - Najib

PEKAN, June 1 (Bernama) -- Deputy Prime Minister Datuk Seri Najib Tun Razak said today any potential strategic partner for Proton must appreciate the ground rules involved.

The partner must also abide by the parameters that have been set, he added, reminding that as a vital national company it will never be allowed to fall into foreign control.

"We are seeking a strategic partner to have a firm collaboration of the strengths of both Proton and the partner, and we believe this will enable Proton to become more competitive.

"(Such a collaboration) must be in line with our thinking and our position, otherwise there cannot be an agreement.

"What this means is that we will not simply hand over Proton, we have our stand that a prospective strategic partner must accept," he told reporters after opening Expo ATM 2007 in conjunction with Pekan Fest here.

Yesterday, Prime Minister Datuk Seri Abdullah Ahmad Badawi said Volkswagen AG had lost interest in having a strategic partnership in terms of equity with Proton, but the car maker's controlling shareholder, Khazanah Nasional, explained today that talks are ongoing with VW and General Motors.

Najib said Proton must take steps to ensure that it re-emerges as a successful company.

"We don't want to see it wallowing in debt even though the environment and market have become more competitive," he stressed. "I believe Proton is already making efforts to to recover."

-- BERNAMA

Talks Still On With Volkswagen, General Motors On Proton, Says Khazanah

Business
June 01, 2007 21:28 PM E-mail this news to a friend Printable version of this news

Talks Still On With Volkswagen, General Motors On Proton, Says Khazanah

KUALA LUMPUR, June 1 (Bernama) -- Volkswagen AG is still talking to national investment arm Khazanah Nasional Bhd on a possible strategic alliance with Proton, as is General Motors, but Khazanah Nasional managing director Datuk Azman Mokhtar was coy today on whether equity participation is still on the table.

He explained that when Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday that VW was not interested in Proton's offer of an equity deal, he was in fact referring to his invitation to the German car maker to talk to him directly.

However, VW has continued to have talks with Khazanah, Azman said. "All the reported interested parties including Volkswagen and General Motors, except for Peugeot who have publicly stepped out of the equation, remain in the picture, notwithstanding some of the statements that may have been made earlier.

"The Prime Minister, I believe, was referring to the fact that Volkswagen had indicated they wanted a meeting from April, so I think he was still waiting (for feedback from Volkswagen by end of March).

"We briefed the Prime Minister today to explain that talks are indeed ongoing and meetings will be set fairly soon," he told reporters at the company's annual review media briefing here.

Azman said Khazanah, which has a 42.74 percent stake in the national car maker, has indeed been instructed by Abdullah to continue this process (negotiations with foreign parties).

A Hamburg report quoted a VW spokesman as saying today: "At the moment, a further round of talks is being prepared for the near future."

On the domestic side, Azman said several parties have declared their interest as well and remain in the picture.

"We are looking to narrow down the choices on both the international and local strategic alliance. I am determined to solve this soonest, certainly by the end of the year," said Azman.

However, he stressed that any structured process done to find a suitable partner will be in an orderly manner from a national governance point of view.

"We are willing and able to do the strategic alliance in a structure that will basically sell some equity to the partners," he said.

"We will be happy to share and work on collaborative models in terms of management, to bring in scale and technology.

"But we will also not disregard the considerable local capability that has been built up over the last 20 years."

Asked if it was conceivable for Proton to have both a local and foreign partner on board, Azman said: "It is not inconceivable."

He also added that Khazanah isn't surprised by the financial losses incurred by Proton but remains concerned with the declining performance in terms of operation.

Yesterday, Proton posted a pre-tax loss of RM619.9 million for the financial year ended March 31, 2007 compared with a RM46.4 million profit a year earlier.

-- BERNAMA

Talk to other firms, Proton told

KUALA LUMPUR: Datuk Seri Abdullah Ahmad Badawi has asked Proton Holdings Bhd to start talks with other carmakers on a partnership because Volkswagen AG is not interested.

“I have made the decision that since Volkswagen is not interested in the proposal that Proton wants in terms of the equity participation but they want cooperation in some other form, Proton can begin to talk to others,” the Prime Minister told reporters after chairing the Umno supreme council meeting last night.

Besides the German carmaker, US-based General Motors Corp had in the past expressed interest along with French PSA Peugeot SA to work with Proton.

When both the car manufacturers pulled out, Volkswagen became the forerunner.

However, the March 31 deadline to announce the strategic foreign partner of Proton passed without any development.

The Government’s investment arm, Khazanah Nasional Bhd, is offering its 38% equity in Proton for sale to save the carmaker from further losses.

Local automotive companies who have been eyeing a stake in Proton include Naza Group, Mofaz Group and DRB-Hicom Bhd.

Abdullah also called on Proton to do whatever necessary to turn around the national car industry.

It was announced yesterday that Proton’s net loss was RM591.4mil for the year ending March 31.

On whether there was a need to revamp the top management of Proton, Abdullah replied: “They have to do whatever is necessary.”

Analysts: Proton has to pull up its socks

PETALING JAYA: Analysts are generally optimistic about Proton Holdings Bhd’s performance for the financial year ended March 31, but there were also rumblings among them that Proton seriously needs to pull up its socks.

Aseambankers executive vice-president and head of equity research Vincent Khoo told StarBiz: “The results were better than expected, and there were some exceptional write-backs.

“However, the good news is that the operational losses came down, partly due to the promotions in March to sell the Saga at a lower price.”



Khoo was also satisfied with Proton’s cash position of RM616.5mil, which he said indicated better inventory management.

Going forward, he expects operational losses to continue although the losses in the previous financial year were due to “exceptional items”. He added that the national car maker was unlikely to “bleed into the current financial year”.

M&A Securities Sdn Bhd research head Wee Kim Hong concurred, saying that although there would not be any profit this year, Proton still needed to achieve that crucial level of sales.

“Incurring a loss has not been unexpected but if the sales numbers don’t grow, profitability levels will be low, looking at past years.”

Overall, Wee said Proton had no other option but to come up with new models, and even then, would need to beat off stiff competition from foreign brands and local rivals, all of which offer competitive prices.

“At the end of the day, sales growth is all about product quality, because the quality of Proton cars is not up to global standards. This is what it needs to work on. If South Korean car manufacturers could do it in 20 years, we can look towards that as an example,” he added.

An analyst at a bank-backed brokerage offered a dimmer view. “Improvement efforts are ongoing but prospects are not promising. Car sales remain weak, especially for Proton vehicles, because it is hard for banks to determine the collateral value of the cars as they keep cutting car prices.”

She added that the market would be a tough playing field, even more so overseas where the competitive environment is more challenging.

On Proton’s financial performance, she said: “They cleaned up a lot in FY07, and I expect them to try to sell some land or non-core assets, which may result in better numbers in FY08. Core operations, however, will remain weak.”

At a briefing yesterday, analysts were informed of the upcoming launch of two new models this year. Although Proton has a 29% share of the domestic car market, its prospects are not entirely bright.

A source said Proton intends to venture into the multi-purpose vehicle (MPV) market as well, and may explore the possibility of launching an MPV model in 2009.

“Compared with the passenger and commercial vehicle segments, the MPV market is growing and may bring new opportunities,” the source said.

“There’s a lot of competition, with Perodua’s Viva already in the market and Toyota launching new models as well,” an analyst with a local research house told StarBiz. “I think Proton still needs to focus on finding the right partner,” he added.

The source added that Proton had said the Government was still conducting talks with General Motors, but said the prognosis for a possible tie-up at present “does not seem too optimistic, compared with what was said at last year’s briefing.”

Analysts, however, applauded the company’s move to right size its dealer network and slash costs. Proton is said to have trimmed its network from 400 to 320 outlets.

Another decision to tap into the Indonesian, Chinese, Indian and Iranian markets also met with approval. “They have some presence in those countries already, but intend to grow it, but will also face stiff competition,” an analyst said.

Proton posts RM591mil loss

PETALING JAYA: Proton Holdings Bhd failed to meet its key performance indicators (KPIs) for the fiscal year ended March 31 (FY07) as revenue dropped 37% to RM4.9bil from RM7.8bil in FY06.

It posted a whopping net loss of RM591.4mil against a profit of RM46.7mil previously. Loss per share stood at 107.7 sen compared with earnings per share of 8.4 sen in FY06.

Among Proton’s KPIs were to generate revenue growth of 12.4% via higher domestic and export sales, and increase earnings before income tax margin to 2.5% from 0.5% previously.


However, during the full year, Proton only managed to sell 110,358 cars, which was a 40% drop from 183,824 units sold in FY06.

The weak performance was attributed to a challenging operating environment, which saw intense competition compounded by lower used-car values and stringent loan application screening that put credit squeeze on prospective clients.

During the fourth quarter (Q4), Proton posted a net loss of RM913,000 from a profit of RM126.9mil in the previous corresponding period.

Revenue slid 29% to RM1.3bil against RM1.8bil previously. Loss per share stood at 0.2 sen against earnings per share of 23.1 sen a year earlier.

Managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said in a statement yesterday that the losses were due to lower sales volume and a combination of other factors, including one-off expenses and provisions.

Among the exceptional items were the right-sizing costs incurred by a subsidiary and higher amortisation of dies and jigs due to unmet volume.

Additionally, there were provisions of claims for the previous year’s project development cost and higher component and raw material costs due to late confirmation of component prices.

While the current financial year remains challenging, Proton intends to focus on operational efficiency, cost competitiveness, introduction of new models and more aggressive marketing campaigns to mitigate the impact of the weak car industry.

“These focus areas will enhance prospects of sales and cashflow, which will help improve the company’s position and restore its financial performance,” Syed Zainal said.

The efforts have already borne some fruit, such as the reversal in sales volume decline in Q4 which showed a 29% increase to 27,458 units from 21,248 in Q3.

Sales operations improved further through enhancement in sales representatives’ practices, pre-delivery inspection and sales service, as well as improved standard operating procedures.

The national carmaker was on track in the current fiscal year to introduce two new models which were potentially high-volume cars that would improve the product portfolio significantly, the statement said.

On the sales network and vendor rationalisation exercise, the combined Proton Edar and EON branch and dealer network would be reduced to 300 outlets by year-end based on performance and location, it said.

In FY07, the carmaker exported more cars, which totalled 20,595 units, compared with 12,526 in FY06.

The statement said demand had been good from the Middle East, Britain and Australia while new markets like Indonesia and South Africa were “showing promise.”

The positive sentiment has prompted Proton to expand assembly operations in Iran and exports are expected to increase further during FY08.

On the strategic alliance, Syed Zainal said the company was in close consultation with the Government and other stakeholders, and that a strategic partner “will consolidate and strengthen our business,” given the added value the partner would bring into Proton’s operations.

PROTON : [Stock Watch] [News]

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Analysts: Proton has to pull up its socks
Talk to other firms, Proton told

PM: Kembalikan untung -- *Proton rugi RM619.9 juta *Tiada kerjasama dengan Volkswagen

KUALA LUMPUR 31 Mei – Datuk Seri Abdullah Ahmad Badawi mahu Proton Holdings Bhd. (Proton) yang mengalami kerugian sebelum cukai RM619.9 juta bagi tahun kewangan berakhir 31 Mac lalu, segera melakukan sesuatu supaya kembali mencatat keuntungan.

“Proton tidak boleh terus-menerus mencatat kerugian,’’ kata Perdana Menteri ketika diminta mengulas kerugian Proton yang diumumkan hari ini.

Ditanya adakah kerugian itu memerlukan pengurusan tertinggi syarikat automobil nasional itu dirombak, Abdullah yang juga Menteri Kewangan berkata: “Proton perlu melakukan apa sahaja yang difikirkan perlu.’’

Bagi tahun kewangan sebelum ini, syarikat itu mencatat keuntungan sebelum cukai RM18 juta.

Mengenai kerugian itu, antara lain ia disebabkan jumlah jualan yang lebih rendah dan gabungan faktor lain, termasuk perbelanjaan hangus dan peruntukan lain.

Penjualan kereta Proton pula jatuh sebanyak 40 peratus daripada 183,824 unit kepada 110,358 unit tahun semasa yang disebabkan persekitaran pasaran yang lebih kompetitif.

Bagi tahun kewangan berakhir 31 Mac 2007, pembuat kereta nasional itu turut mencatat penurunan perolehan kepada RM4.9 bilion daripada RM7.8 bilion pada tempoh yang sama tahun sebelumnya.

Perdana Menteri pada sidang akhbar selepas mempengerusikan mesyuarat Majlis Tertinggi UMNO di Menara Dato Onn, Pusat Dagangan Dunia Putra (PWTC), di sini, turut memberitahu kerajaan telah memutuskan bahawa Volkswagen (VW) tidak berminat terhadap cadangan tawaran pemilikan ekuiti oleh Proton.

“Saya telah putuskan bahawa VW tidak berminat terhadap cadangan yang dimahukan Proton dari segi pemilikan ekuiti. Mereka (VW) mahukan kerjasama dalam bentuk lain,” katanya.

Sehubungan itu, Perdana Menteri berpendapat Proton perlu berbincang dengan pihak

lain dalam mendapatkan rakan kongsi strategik.

Dalam pada itu, Pengarah Urusan Proton, Datuk Syed Zainal Abidin Syed Mohamed Tahir dalam satu kenyataan bagi mengumumkan kedudukan kewangan syarikat kereta nasional itu hari ini menjelaskan, kejatuhan nilai kereta terpakai selain amalan penapisan permohonan pinjaman yang lebih ketat turut memberi kesan kepada bakal pembeli kereta nasional itu.

“Keputusan kewangan Proton juga terjejas akibat perbelanjaan hangus dan peruntukan lain,” katanya ketika mengulas kerugian tersebut.

Namun begitu, saham Proton ditutup lebih tinggi pada RM5.35, naik 25 sen dengan 5,845 lot saham bertukar tangan sepanjang sesi dagangan hari ini.

Tambah Syed Zainal, bagi menghadapi cabaran operasi pada tahun kewangan 2007/08 yang dijangka lebih mencabar, Proton akan memberi tumpuan kepada keberkesanan operasi, kos yang lebih kompetitif serta pengenalan model baru, selain kempen pemasaran yang lebih fokus dan agresif.

Sebagai contoh, katanya, inisiatif itu telah membuahkan hasil apabila penjualan kereta meningkat sebanyak 29 peratus pada suku keempat kepada 27,458 unit berbanding 21,248 unit pada suku ketiga.

Syed Zainal berkata, Proton merancang untuk melancarkan dua model baru pada tahun kewangan 2007/08 yang boleh menarik minat golongan sasaran bakal pembeli.

Bagi meningkatkan rantaian nilainya, Syed Zainal berkata, pelaksanaan program rasionalisasi rangkaian jualan dan vendornya sedang dilaksanakan dan gabungan pengedar Proton Edar dan cawangan EON akan dikurangkan kepada 300 pada akhir tahun ini.

Proton juga, kata beliau, telah mengeksport 20,595 unit kereta pada tahun kewangan terakhirnya berbanding 12,526 unit pada tahun kewangan sebelumnya.

Mengenai rakan strategik Proton, beliau berkata, pihaknya sedang berunding dengan kerajaan dan pemegang saham lain dan beliau percaya rakan strategik syarikat itu akan memperkukuhkan perniagaannya selain meningkatkan nilai tambah dalam operasinya.

Proton Extends Time To Acquire 49 Pct Stake In PT Proton Tracoma

KUALA LUMPUR, May 31 (Bernama) -- Proton Holdings Bhd and Tracoma Holdings Bhd have agreed to extend the date for the proposed acquisition by Proton the remaining 49 percent equity interest in PT Proton Tracoma Motors (PTPTM), worth US$10 million (US$1=RM3.40) from Tracoma.In a filling to Bursa Malaysia today, Proton said the company and Tracoma have mutually agreed to extend the date to fulfill all the conditions under the proposed acquisition of PTPTM as stated in the sale and purchase agreement dated Jan 30 this year.PT Proton Tracoma is involved in the manufacturing, assembly, sales and distribution of motor vehicles in Indonesia.Proton, in an announcement to the stock exchange early this year stated that the acquisition would allow it to gain full control over PT Proton Tracoma, which in turn is expected to contribute positively to the group's performance in the future.The national car maker company viewed Indonesia as a promosing market to expand its market base.-- BERNAMA

Talk to other firms, Proton told

KUALA LUMPUR: Datuk Seri Abdullah Ahmad Badawi has asked Proton Holdings Bhd to start talks with other carmakers on a partnership because Volkswagen AG is not interested.

“I have made the decision that since Volkswagen is not interested in the proposal that Proton wants in terms of the equity participation but they want cooperation in some other form, Proton can begin to talk to others,” the Prime Minister told reporters after chairing the Umno supreme council meeting last night.

Besides the German carmaker, US-based General Motors Corp had in the past expressed interest along with French PSA Peugeot SA to work with Proton.

When both the car manufacturers pulled out, Volkswagen became the forerunner.

However, the March 31 deadline to announce the strategic foreign partner of Proton passed without any development.

The Government’s investment arm, Khazanah Nasional Bhd, is offering its 38% equity in Proton for sale to save the carmaker from further losses.

Local automotive companies who have been eyeing a stake in Proton include Naza Group, Mofaz Group and DRB-Hicom Bhd.

Abdullah also called on Proton to do whatever necessary to turn around the national car industry.

It was announced yesterday that Proton’s net loss was RM591.4mil for the year ending March 31.

On whether there was a need to revamp the top management of Proton, Abdullah replied: “They have to do whatever is necessary.”