SOME of us have been complaining rather loudly of the fact that Proton would likely see a new shareholder in the form of a Chinese automotive company.
“We are selling out to the Chinese” has been the narrative these days due to the upsurge in Chinese interest to invest in Malaysia. Now, it is Proton, a home-grown car company, that will be sold, we may be jumping the gun here, to the Chinese.
This episode reminds me of a taxi ride I had in London a while back when I asked the driver what he thought of Chinese car company, Geely, buying the maker of the city’s iconic black cabs.
He, too, was not charitable with his choice of words. Surely, it was not right for a British icon to be owned and built by a foreign entity, a Chinese one at that.
Did I detect a tinge of racism there? Of course I did, just as I do now in the case of Proton. It was said there were French and German suitors, too, but not much noise was made of that.
He blamed everyone, but he did not acknowledge the fact that the company was having problem business-wise.
I also did not have the heart to tell him that the heyday of the British automotive industry ofthe 1960s was long gone and that most of the marques associated with the best of the country’s automotive industry, are now foreign-owned.
Jaguar Land Rover for instance is owned by the Tata Group of India, and German firm BMW now runs two British icons — Rolls Royce and MG Rover, which produces the Mini.
Even our Proton owns famed Brit sportscar maker Lotus.
If it is indeed going to be China’s Geely that buys into Proton, as many reports speculate, Proton will join not only the manufacturer of the London black cabs, but also famed Swedish carmaker Volvo, as part of its investments.
We have this love-hate relationship with Proton. We hate it for the fact thatto support Proton in the past, we had developed a protectionist auto policy. Everyone complains about how some German makes are so much cheaper elsewhere, and why we have to buy Malaysian.
It was true, of course, but there was a national agenda getting in the way of our own personal ones. We hate Proton, for that.
Automotive companies worldwide — more so in the past since now we have all the multilateral trade pacts rolling back trade barriers — survive on government handouts and protectionist policies. It was true for Proton then when it was a government company, though lesser now that it is in private hands.
Governments do so because making cars has been identified as one of the key drivers for the manufacturing sector due to the wide expanse of supporting industries it needs, hence the creation of new business and jobs. The car industry was also seen as a stimulus into heavy industy, as well asapotential export revenue earner.
South Korea, for example, did not become what it is today without a very strict import substitution policy.
It was a must for every foreign brand to be made in the country before it could be sold there. Its big conglomerates were highly subsidised and protected, and government interventions were rife at home and abroad.
The Samsungs and the Hyundais thrive amid the protectionism, favourable financing and export incentives, and now they are among Seoul’s flag bearers.
In Malaysia, favourable incentives have allowed Proton to develop, from largely an assembly-based operation in the 1980s of Mitsubishi models to be sold as Proton’s, to fully-fledged Malaysian-made cars, designed and made by Malaysians.
In fact, one of the strengths of Proton, is the hundreds of research and development engineers. It was something unimaginable when it was rebadging Mitsubishi cars at its start, and when the idea of Malaysians making cars were punchlines of selfdeprecating jokes.
It is a home-grown car manufacturer when we had none before, and we love Proton for that.
This is not the first time a foreign partner was thought of for Proton; several years ago French and German carmakers were also considered by its board and management.
Any purchase of interest or asset represents an unlocking of the value of the company. Proton instantly becomes more valuable when a suitor comes a-calling. Potential investors would not only be bringing in money, but also access to technology, markets, brand, and expertise, among others.
Anyway, the story of the global automotive industry is littered with cross-investments, mergers and acquisitions.
Corporate deals emerged to rescue companies or grow them or open up new markets.
Many of the famed brands have been kept alive by foreign investments, despite the expected, and understandably, vocal protest against foreigners buying into local institutions.
What was true then when Proton was considering a foreign partner, is also true now. The owners of Proton must be driven by the same desire to see the company be profitable and sustainable. This means thousands of jobs, either directly or indirectly through its extensive networks of vendors, are kept, and hopefully thousands more created.
I believe most important, however, is not whether the new investor is Chinese, French or German, or in fact Malaysian, but it is their commitment to the Malaysian automotive industry and Malaysia that matters most.
Zainul Arifin, a former NSTP group managing editor, is now a social media observer