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Free Website Counters SPY the Man: 27-11-2007: Govt may re-look at local partners for Proton

Wednesday, November 28, 2007

27-11-2007: Govt may re-look at local partners for Proton

KUALA LUMPUR: The government may still consider the possibility of a local automotive player as a strategic partner in Proton Holdings Bhd following the termination of talks with Volkswagen AG (VW) and General Motors, said Deputy Prime Minister Datuk Seri Najib Razak.

“We will decide later. We have to talk to the Proton management (on this),” he said in response to a question whether local players like DRB-Hicom Bhd and Naza Group still figured as possible partners in Proton.

Speaking to reporters after launching Scomi Group Bhd’s next generation monorail Sutra (Scomi Urban Transit Rail Application) here yesterday, Najib said although Proton’s management had its plans, it had not formally submitted a business turnaround plan to him.

Najib heads the Cabinet Committee on National Automotive Policy, which ultimately made the decision to withdraw from the negotiations with VW following a final reappraisal of whether the time was right to enter a strategic alliance with a major car manufacturer.

Last Tuesday, Second Finance Minister Tan Sri Nor Mohamed Yakcop announced that the government had decided to withdraw from talks with VW and GM to sell a strategic stake in the national car project.

Proton’s share price plunged to a seven-year low the following day to RM4.02. The stock continued its slide yesterday, falling 22 sen to close at RM3.82 with 4.92 million shares traded.

Subsequently, quoting a Finance Ministry official, who declined to be identified, The Edge Financial Daily had reported that the government would not be talking to local automotive players which had expressed interest in acquiring a stake in Proton.

Meanwhile, on the sidelines of the Scomi monorail launch, Naza Group chief executive officer Tan Sri Nasimuddin SM Amin told reporters that Naza was still keen on partnering Proton.

“Proton is a good company and we are willing to share with it our technical, research and development, and marketing experience,” he said.

On whether the withdrawal of negotiations with the foreign carmakers stemmed from Proton’s recommendation, Najib told The Edge Financial Daily: “No, it was not Proton. Just take what the Prime Minister (Datuk Seri Abdullah Ahmad Badawi) had earlier said as the factors for the withdrawal.”

Last week, following the termination of talks with VW, Abdullah had said Proton was doing well and had started turning around.

“(The) Proton management has already demonstrated the ability to turn around. The situation that Proton is in today is not the same like two, three years ago,” he had said.

Abdullah had said the government had asked Proton to have a turnaround plan, in the same way Malaysia Airlines achieved a turnaround.

Earlier yesterday, Sharon Tan reported Najib as saying that the market should give the national carmaker a chance to turn around its performance given the recent positive development in the company.

Asked if the company’s continued sliding share prices was due to market over-reaction, Najib said: “Obviously the market was expecting the announcement of strategic partner and it didn’t happen.”

“There was a negative reaction by the market but the government is mindful of the fact this is our national car company.

“We have to balance between business interest as well as the desire of the people to see the national car remain in our hands,” Najib told reporters after witnessing the delivery by Eurocopter Malaysia of three helicopters to the Malaysian Maritime Enforcement Agency in Petaling Jaya yesterday.

Najib said Proton could not survive depending solely on the domestic market, and “we have to go within Asean and slightly beyond the region.”

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What is the main factor for you to buy a Proton Car?
Low price and no other choice due to budget
Good resale value
Low maintenance cost
Ride & Handling is good
Reliable parts, chasis and engine
Good Styling exterior & Interior
Patriotism (I support Made in Malaysia Products)
Follow others (Follow Majorities should be the best choice)