Original posting
So DRB-Hicom, the group that brings in VW, among other models, will be taking over national car Proton Holdings. Their shares have been suspended from this morning. Expect the announcement at the end of today to place the price of acquisition at anywhere between RM3 billion and RM3.4 billion.
So DRB-Hicom, the group that brings in VW, among other models, will be taking over national car Proton Holdings. Their shares have been suspended from this morning. Expect the announcement at the end of today to place the price of acquisition at anywhere between RM3 billion and RM3.4 billion.
Eyes on Khamil now |
With this, Khazanah Nasional gets to walk away from something it has said it didn't want to meddle with in the first place and DRB-Hicom gets to expand its automotive empire. Proton? The national car gets another chance it deserves. The bad news is, this will be its final chance. If DRB-Hicom fails to do whatever it says it can for the national car in its proposal, Proton is forever doomed. So will Malaysia's 30-year dream of becoming an auto powerhouse of the region.
Personally, I was not in favor of the thought of any of the bidders getting a shot at Proton. The other bidders, especially Naza, are capable of taking over Proton as well. I had long chats with Big Dog [read his Driving the Industry Forward, Jan 15] about this. I felt we should commission a comprehensive national study to establish the way forward for the national car before anyone gets a chance to take over, IF anyone gets that chance at all.
We should learn from Malaysia Airlines. From a world-class airline that was being compared with SIA at one time, MAS has declined to a class even lower than Air Asia. Why? For years, business was conducted without proper study or even discussion with stakeholders, and things happened as if MAS was just another company and not a national airline.
But now that it's done, a national burden lies squarely on the shoulders of Mohd Khamil Jami, the managing director of DRB-Hicom, the man credited to have turned around the company into the giant that it is today. A lot of people will be watching closely now ...
Alamak, you and your spin again. Eyes on Khamil ? Khamil is just a shoe shine boy for the richest Melayu in town. He is getting richer since everything the gomen divests goes to him. You don't feel sorry for the ordinary Melayus ?
ReplyDeleteGodfather
Syed Mokhtar Albukarey can only thrive if there is protectionism. Look at his IPPs, his ports, his bank, his post office and now his car manufacturing. Even his sugar business and rice business needs protectionism. Open up for competition and the world's richest Melayu won't be that rich.....
ReplyDeleteGodfather
You tell me bro, how can Proton ever be successful when the production volume is so low?
ReplyDeleteThe only way forward is for Proton to produce niche cars like Lamborgini or Ferari with the right technology and appeal. This seems almost impossible.
Pray to God That Proton does not end up being messed about like MAS.
ReplyDeleteLook at the technology that the VW group brings to the table. Small cc turbocharged engines, 6- and 7-speed automatic transmissions and a build quality that is one of the best in the industry.
ReplyDeleteAll of which Proton could have had access to if the government had pursued VW's interest in acquiring a stake in Proton.
Possibly, Dr Mahathir, and those sympathetic to his thinking, scuppered this in their desire to keep the national car project alive.
How this will be reconciled with the trade commitments that Malaysia has to embrace in in the Asean free trade area (FTA), the bilteral FTAs with India, China and Japan, the proposed EU-Asean FTA and the proposed TPP (Trans Pacific Partnership) FTA remains to be seen.
None of Malaysia's major trading partners will be willing to give it a permanent "free pass" in protecting it's national car project.
The government has been "buying time" all this while as far as Proton is concerned. How much more time can it buy before it's trading partners run out of patience?
Syed Bukhari bought Proton??? sighhh...it means proton will increase price..the more Syed Bukhari touch the higher the price going to be...Proven track record..hahaha
ReplyDeleteDRB hicom pun jadi la. Dlm proton byk org PAS (eg ingress employess). Kalau dpt pada azmin ke, anuwar ke, lagi la parah. kalau dpt kat kit siang and the gang terus jadi DAP-Hicom le.
ReplyDelete"But now that it's done, a national burden lies squarely on the shoulders of Mohd Khamil Jami, the managing director of DRB-Hicom," unquote.
ReplyDeleteYou make my toe laugh. Now as before, it lie squarely on taxpayers or EpF's shoulders as back up or bailout whatever we want to call it.
Syed Mokh has made it big by riding on foreign-sourced technologies in his various businesses.
ReplyDeleteWhen has he and his employees brought any original technologies to the table.
Yet Khazanah, in its infinite wisdom, has anointed him as the chosen white knight for Proton.
It just means more sleepless nights for his bankers!
Incidentally, what are Proton's market shares in the Asean countries, where there are free markets for car imports?
Rocky,
ReplyDeleteCongratulations to DRB Hicom...
One sure way of digging an early grave...
Like any poorly run company in a highly competitive business, it should be shut down.
The ingot of deindustrialization of Malaysia has been casted....Ministry of Higher Education should go to the drawing board again..reduce or shrink the size of Faculties that teach Sciences, Engineering or Technology at all public universities...and expand by leap and bounds Faculties that offered liberal Arts, Economy, Business...that's the price we malaysians has to pay when we are lead by Non Technocrat...or if there were technocrats in the government they are just a bunch of mice..
ReplyDeleteProf Awe Kecik
p.s Requiem to Tun Mahathir
In Singapore, the Proton Saga 1.3 auto 4dr sells for S$91,999. The VW Golf 1.2 auto 5dr and Golf 1.4 auto 5dr sell for S$129,300 and S$133,300 respectively. And yet, the Golf outsells the Saga.
ReplyDeleteCheap and cheerful don't cut it anymore.
But, then, Syed Mokh's highly-paid brains trust would have told him this already.
Unless he's trying to emulate the Tata Nano strategy.
And, no, I don't see the Malaysian Cabinet and assorted VVIPs riding around in the Proton version of the Nano!
Datuk,
ReplyDeleteI've been reading some immediate response on this & some ppl claiming that Khazanah sold Proton off to DRB Hicom at RM5.50 as "cheap".
RM 5.50 per share is not cheap.
If one considers that net fixed assets per share RM6.53 & Khazanah has never been interested to fork out more for investments, then now its a burden from DRB Hicom to inject investments which incl cash, on top pay off for this acquisition.
If the investment injection require is at the neighbourhood of RM 2 billion or roughly RM 4.00 per share, then DRB Group is looking at RM 9.50-9.70 per share to acquire Proton. It would take years for DRB to recover this acquisition & additional investment.
As is (RM5.50), Proton is not even value for money.
If Khazanah had sold Proton for less than RM 3.50, then it is cheap.
Never the less, I'm confident DRB Hicom is determined to make the national car project successful. For the record, Al Bukhary had never hived off any of the projects they took over.
This "Last Chance for Proton" is probably the best they have at hand, considering Khazanah's attitude on how they have been taking care of Fed Govt's investments and business assets.
"A final chance", and what a sad story not just for Proton but also for all Malaysians directly and indirectly.
ReplyDeleteMuch as it is one of Dr Mahathir's per projects - and you can't blame him for his big ambitions - let's just scrap it and move on if it still fails to get anywhere. Proton has been given enough chances to make it and the government can't reasonable expect us to shoulder it for too much longer.
Many of us here would remember the pre-Proton days when it was mostly a fight between Nissan Sunny 130Y and Toyota Corolla GL, and then LE, with the Mitsubishi Lancer a distant third. And all were under RM20,000 in 1983.
I had driven a third-hand Corolla GL for a few years (already 8 years old when I bought it), and it was the best car I ever had... better than the second-hand Proton Megavalve 1.3 I had stupidly replaced it with. The back absorbers were only RM90 for a pair!
Then came The first Proton Saga - protected by the government, which resulted in the other makes costing significantly higher due to the taxes and what not. Okay, we should be nationalistic and help our very own; fine. However, when it continually fails to make good, again and again, wouldn't it be fair to all to just cut it loose?
I tend to digress but this is something indirectly connected to the post: From my own experiences with two Protons (the other was the Waja), many of the vendors who were selected to participate by providing various parts had failed. And badly.
ReplyDeleteI dare to say that anyone who had used a Waja should be happy enough with its performance. Yeah, it's attempt to position itself as "Asia's reply to the BMW" was embarrassing - it definitely IS NOT.
However, it is a good car in its own right for the Waja is a really smooth and comfortable car. Would you believe that I prefer the Waja to a Honda Accord of about the same age? Yes, it is that good.
Unfortunately, some of the Malaysian-made components are of very poor quality - the inside of the car especially with its cheap plastic (but the seats are good). This extends to the air filter - the clip of its cover tends to break. The headlights also don't last long; nor do the power windows. And these are the things that drag the Proton name down.
The vendors should be ashamed of themselves, for it is they who had contributed to Proton's "unreliable/low quality" perception among many. It's such a shame for the Waja could have even been called "great" had it not been for these shoddy products.
Rocky,
ReplyDeleteCall it jealousy or whatever, but this Syed Mokhtar has got his hands many times on the receiving end whenever government plans to sell its assets or privatize certain services. Those in the business circle too knows too well that his empire of business covers points of entries to the country, long list of highways, either directly or through its link company. Then, there's development arm which acquire government lands all over te country. Not to mention too, energy utilities.
Rocky,
Who are we to blame the rakyat if they cannot stop talking about this Syed Mokhtar and associate him with cronism. We have seen similar case in the past in the form of YTL and Berjaya (during Tun M time) and SCOMI (during Badawi time). Talk is rife in UKAS that if a Syed Mokhtar is bidding for a job, it's best to just stand down.
I seriously hope the PM will relook at this issue. He certainly is the last person to want the rakyat to vote against BN.
Next up is Penang Port bid by Seaport, also a Syed Mokhtar's company. We will see how it pans out.
In khazanah's press statement, Amok calls this another significant milestone for khazanah...ha ha ha, say, how much are we paying dude?
ReplyDeleteI have got one question...now that Proton is with non-govt related company like drb, would it still be protected?
Jebat
Patut lah Albukarey dapat,,,,kawan baik Muhyiddin,,!!!!!
ReplyDeleteDari dulu any renovation/repair kat rumah TPM mesti kontractor dari DRB.
-bengong-
i really don't understand all this shit but whenever i want to have a good laugh i drive with my wife in her new proton saga. everything seems to fall to pieces after a couple of years so i said i promise to sit still when i'm in the car...i of course drive a camry.
ReplyDeletethere's a lesson there somewhere. to be competitive make a car that one can be proud of...and branding is everything. even people in laos won't want to own a proton. i don't care if fucking ibrahim ali is leading the management but get the focus right....
"Crony"?? How is this so? If paying RM5.50 per share is cronyism, then let's have more of it. Pandai betul pilih handle "Bengong" bila tulis kat sini.
ReplyDeleteI would agree with Quad Erat Demonstratum about the price. Don't really know whether it can be termed as "good" but Khazanah is certainly getting a very fair price, at the very least. Proton's PE Ratio at this price is about 20 if I'm not mistaken with no dividends paid last year.
The latter isn't necessarily a bad thing, of course (unless if you are an investor), since the company would have more cash in their hands. But then, it's a known fact that it doesn't have too much of that either, which is also one reason why Proton has difficulty in bringing out new models.
Selling it off to DRB is perhaps the best option for all, including the government since it wants control to be in the hands of Malaysians. And perhaps, too, it's better to have just one national car company.
Just one massive regret - the "if only"... yeah, if only we had bought Proton shares a year ago when it was around RM2.60. This would have brought returns that even Warren Buffett would have envied.
getting a good deal Can't understand how some people ar
Rocky,
ReplyDeleteDRB merely paid RM1.291B for Proton- very cheap since the Tg Malim itself worth over RM300m if Proton sell partly to GM, Shah Alam plant land-bank easily fetch RM500M if redevelop for housing estate (RM0.5B is very conservative value of the land).
Did I mentioned about small volume Lotus? The niche sport car maker projected to unveil their new cars in 2013-2014- already pumped billions by parent- Proton.
That's why Proton is government NFC to DRB. I also forgot about P3-21A sedan. Tentatively will be launch in March 2012. I couldn't afford to assume Malaysia darling got too much of our resource, at very bargain price. Let assume, he'll sell after two years grace period?
First course of action is to fire all Proton top mgmt.....they have done very little to the national car company....
ReplyDeleteRocky,
ReplyDeleteYou can rest assure THERE IS A TRADEOFF SOMEWHERE..
We always Remember TRADEOFFS with Government whenever they have a Problem Company to dispose of.
Question is What LUCRATIVE TRADEOFF Did SYED AlBukahri Get this time?
Joe Black
pROTon...
ReplyDeletePURE RACKETEERING!
ReplyDeleteBUKARI KONONNYA JUAL KERETA MELAYU....PERLU DISOKONG DENGAN MENGENAKAN CUKAI KETERLALUAN KEATAS RAKYAT YANG MEMBELI KERETA IMPOT.
TAPI BUKARI JUGA YANG JUAL HONDA , SUZUKI, AUDI, CHEVROLET, ETC ETC.
BERMAKNA BUKARI BERPAKAT DENGAN KERAJAAN UNTUK MENIPU RAKYAT! BETUL TAK?
KENAPA HARUS RAKYAT MENGUNDI KERAJAAN YANG MENGANIAYAI RAKYAT SENDIRI?
The key people in most Syed Mokhtar's oraganisations bukan melayu pun. Makes you wonder doesnt it. So now that Govt doesnt own PROTON anymore- there shouldnt be anymore Protectionist Taxation Policy. Why should rakyat bear tax burden to enrich Syed Mokhtar. CARS SHOULD COST A LOT LESS FROM NOW.
ReplyDeleteSaga owner since 1989...still going strong with regular services from the same mechanic.
ReplyDeleteIf one drives a BMW like a beruk.... perhaps a Tank can tahan lama. Its all up to the driver/owner.
It really doesnt matter who owns Proton as long as the consumer is the co winner @ the end of the day.
Give to NAZA..spare parts are very costly.
Give to VW...perhaps we can take on the world but remember..the Germans are known to be very brutal in their business dealings. Proton may conquer the world but will Malaysians get cheaper Protons than the other cars?
Even if the devil gets Proton also I dont mind as long as we consumers will benefit using Proton cars.
Lets move on..send constructive suggestions to Syed Al Bukhari...
he isnt an AlJuburi..so no worries!
So the UMNO crony buys Proton with RM 200 million, with the balance coming from Maybank and other lenders. This is UMNO's way of spreading the wealth ? May Allah save Bolehland.
ReplyDeleteGodfather
Ha Rocky,
ReplyDeleteNo company will succeed in this country..and proton is no exeption even with the great socalled advisor..Look at all the businesses.. running at a loss,despite all the billions pumped in them..end of the day they burden the rakyat only.. simply no management skills
rakyat
Orang Cina, seperti Robert Kuok , pun dapat AP dari dulu lagi untuk import gula. Orang Cina dapat lesen sekolah swasta , kolej swasta dan IPTS dari dulu lagi. Orang Cina juga dapat AP import kereta dan AP import barang barang mewah. Franchise McDonald, dll. Orang India pula dapat lesen ASTRO. Tapi orang tak anggap dia dapat protection dari Kerajaan. Bila orang Melayu dapat AP, orang Melayu dan Cina pun sama sama kutuk peniaga melayu itu. Ini tidak adil pada peniaga Melayu.
ReplyDeleteThis really does look like the Proton's last stand. It will be interesting to see if and how the car's fortunes will be turned around. One thing's for sure - there's a lot of work to be done.
ReplyDelete