Published on February 7th, 2017 | by Amirul Mukminin0
Foreign Strategic Partner Key Part of Proton’s Success
DRB-Hicom, as 100% owner of Proton, believes that the national automaker can be a more successful carmaker once a foreign strategic partner (FSP) is on-board. The entry of a FSP will enable Proton to revitalize itself through access to new platforms, powertrains and technologies which will further improve its range of products and its quality.
DRB-Hicom remains committed to revive Proton’s fortunes, and finding the right FSP is critical to that goal. History has shown that collaborations between a smaller carmaker and a larger carmaker can revive the former’s fortunes. DRB-HICOM is confident that with the right FSP, Proton will enhance its brand equity can again be a successful carmaker as it was in the 1980s and 1990s.
The Right Fit for Proton
In finding the right FSP for Proton, DRB-Hicom will evaluate three key criteria, which are strategic, operational and cultural fit.
A strategic fit will enable both parties to derive tangible benefits from the range of technology and products available, which will complement each other’s needs in their own markets. This strategic fit will also ensure that Proton can achieve economies of scale from its domestic operations. In evaluating the potential partners, DRB-Hicom will insist that the Proton badge and its technology will be expanded into ASEAN markets first and global arena subsequently.
An operational fit with the FSP ensures that both Proton and the partner will complement each other’s strengths. The structures that exist within each company must be able to blend well so as to achieve seamless operation at Proton and the partner themselves.
As in any collaboration, a cultural fit will ensure a successful union. This “chemistry” between the two parties will be critical in pushing the automaker forward while enhancing the FSP’s own operations vis-à-vis their short and long-term plans.
Proton Will Benefit the FSP Too
Contrary to common belief, PROTON too has plenty to offer to the eventual FSP. First, they will have at their disposal PROTON’s own range of affordable cars, such as Persona, Saga, Preve and Iriz. These cars are manufactured to high production standards and meet global safety standards. Any carmaker that is on board with Proton will be able to find a range of cars to offer specific markets across the globe.
Secondly, one of the immediate advantages available to any carmaker partnering with Proton is the ability to immediately increase their production capacity through the company’s Tanjung Malim plant, which has a low utilization rate presently. Optimising the use of the modern facility will also benefit the local workforce with increased employment opportunities through full capacity utilisation at the plant.
Finally, Proton has its own in-house research and development team, as well as the lightweight platform technology of Lotus Cars UK. The combined engineering capabilities of Proton and the Lotus offers a FSP enhancements to their current capabilities, which will enable them to enhance their existing R&D capabilities.
Proton is a National Carmaker
DRB-Hicom’s search for a FSP for Proton is a critical exercise to ensure the sustainability of the national carmaker. As a local company, DRB-Hicom has a significant equitiy in Proton and maintains as the owner of the first national and ASEAN’s only car manufacturer.
As a responsible shareholder, DRB-Hicom shall also assess the intention of the potential partners in utilizing the current “home-grown” vendor network. This is a very significant element in its evaluation, as DRB-Hicom who also own subsidiaries serving Proton as vendors, would avoid for these “home-grown” network to be diluted substantially.
Status of Search
As stated previously, the parties have conducted their own due diligence on Proton over the past few weeks. DRB-Hicom is now waiting for the submission of bids from the parties, after which an earnest evaluation of the bids will commence. The company aims complete the selection by the first half of this year.