Proton sale: Malaysia’s ex-PM bemoans “loss of national car brand”

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Malaysia’s former Prime Minister Mahathir Mohamad is not amused about the sale of a 49.9-per-cent stake of national car maker Proton to Chinese automotive company Geely.

“It has been sold to foreigners, hence it is a foreign brand. We have just lost one of the country’s icons,” he said during a speech at a congress of his newly founded opposition party Malaysian United Indigenous Party on May 24. “My child is lost,” he added.

Mahathir has been labeled the “father” of Proton, previously Southeast Asia’s only nationally-owned car manufacturer which he established in 1983, a year after he became prime minister, in a quest to promote Malaysia’s industrialisation in an economy that heavily relied on commodities at that time.

However, Proton has ever since been far from commercial success and a drain to its owners, formerly Malaysia,’s sovereign wealth fund Khazanah Nasional, and later on industrial conglomerate DRB-HICOM which will retain he remaining 51 per cent of Proton. The brand sold 72,290 vehicles last year compared with 102,175 units in 2015 and survived mainly with the help of government loans.

Mahatir put the problems of Proton, for which he acted as adviser between 2003 and last year, solely on the government led by Prime Minister Najib Razak which in his opinion did not sufficiently support the “national pride,” but rather “sold it off to a foreign company.”

“The sale of Proton’s stake showed that the government is bankrupt. Putrajaya was not even able to offer a little bit of help,” Mahathir complained, referring to Malaysia’s seat of the government.

However, Malaysia’s International Trade and Industry Minister Mustapa Mohamed defended the deal.

“Geely has a proven track record and is one of the top Chinese automotive companies. For example, its sales in China grew by 50 per cent last year to 766,000 vehicles. Its acquisition of Volvo in 2010 has been a success. Volvo recorded sales of 540,000 vehicles last year, an increase of over 200,000 units sold in 2009 prior to its acquisition,” he said.

The Chinese carmaker is now expected to bring in new technology and develop new models that would allow Proton access to the huge market in China, as well as right-hand drive markets in Southeast Asia, India, Australia and New Zealand, the UK and South Africa This would bring a better utilisation of Proton’s two factories in Malaysia with a combined capacity to build 380,000 vehicles a year, but lately ran only on 40 per cent of its capacity.

With its Proton deal, Geely also received the trademark rights for iconic British car brand Lotus, which has been acquired by Proton in 1996, but was more or less sitting idle since then.

Geely, apart from its own, less-known brands Emgrand, Englon, Geely, Gleagle and Shanghai Maple, also owns Volvo and The London Taxi Company. Plans are to look for synergies between Volvo and Lotus and join forces in product development and engine production.

Geely is one of China’s biggest independent vehicle makers and largest car exporters. Founded in 1986 as a refrigerator manufacturer, it began making motorbikes in the 1990s and launched its first car in 2002. The company says it aims to produce three million cars across all of its brands by 2020.

In Malaysia, Perodua remains the last locally built auto brand, but the company is minority-owned by Toyota and Mitsui and is using Daihatsu components and engines and assembles Toyotas for sale in Malaysia and other ASEAN countries.

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Reading Time: 3 minutes

Reading Time: 3 minutes

Malaysia’s former Prime Minister Mahathir Mohamad is not amused about the sale of a 49.9-per-cent stake of national car maker Proton to Chinese automotive company Geely.

“It has been sold to foreigners, hence it is a foreign brand. We have just lost one of the country’s icons,” he said during a speech at a congress of his newly founded opposition party Malaysian United Indigenous Party on May 24. “My child is lost,” he added.

Mahathir has been labeled the “father” of Proton, previously Southeast Asia’s only nationally-owned car manufacturer which he established in 1983, a year after he became prime minister, in a quest to promote Malaysia’s industrialisation in an economy that heavily relied on commodities at that time.

However, Proton has ever since been far from commercial success and a drain to its owners, formerly Malaysia,’s sovereign wealth fund Khazanah Nasional, and later on industrial conglomerate DRB-HICOM which will retain he remaining 51 per cent of Proton. The brand sold 72,290 vehicles last year compared with 102,175 units in 2015 and survived mainly with the help of government loans.

Mahatir put the problems of Proton, for which he acted as adviser between 2003 and last year, solely on the government led by Prime Minister Najib Razak which in his opinion did not sufficiently support the “national pride,” but rather “sold it off to a foreign company.”

“The sale of Proton’s stake showed that the government is bankrupt. Putrajaya was not even able to offer a little bit of help,” Mahathir complained, referring to Malaysia’s seat of the government.

However, Malaysia’s International Trade and Industry Minister Mustapa Mohamed defended the deal.

“Geely has a proven track record and is one of the top Chinese automotive companies. For example, its sales in China grew by 50 per cent last year to 766,000 vehicles. Its acquisition of Volvo in 2010 has been a success. Volvo recorded sales of 540,000 vehicles last year, an increase of over 200,000 units sold in 2009 prior to its acquisition,” he said.

The Chinese carmaker is now expected to bring in new technology and develop new models that would allow Proton access to the huge market in China, as well as right-hand drive markets in Southeast Asia, India, Australia and New Zealand, the UK and South Africa This would bring a better utilisation of Proton’s two factories in Malaysia with a combined capacity to build 380,000 vehicles a year, but lately ran only on 40 per cent of its capacity.

With its Proton deal, Geely also received the trademark rights for iconic British car brand Lotus, which has been acquired by Proton in 1996, but was more or less sitting idle since then.

Geely, apart from its own, less-known brands Emgrand, Englon, Geely, Gleagle and Shanghai Maple, also owns Volvo and The London Taxi Company. Plans are to look for synergies between Volvo and Lotus and join forces in product development and engine production.

Geely is one of China’s biggest independent vehicle makers and largest car exporters. Founded in 1986 as a refrigerator manufacturer, it began making motorbikes in the 1990s and launched its first car in 2002. The company says it aims to produce three million cars across all of its brands by 2020.

In Malaysia, Perodua remains the last locally built auto brand, but the company is minority-owned by Toyota and Mitsui and is using Daihatsu components and engines and assembles Toyotas for sale in Malaysia and other ASEAN countries.

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