NEWS: Proton records RM105 mil profit in Q1, growth in all areas

SOURCE: Paul Tan's Blog

August 23, 2010 at 11:24 pm By Danny Tan

Proton records RM105 mil profit in Q1, growth in all areas

National carmaker Proton announced its financial results for the first quarter of the company’s 2010/11 financial year. It was positive figures across the board, with a headline of RM105 million profit before tax in Q1. This is significantly more than the RM13 million profit made in the previous quarter (Q4 09/10). In the same period of the previous financial year, Proton posted RM64 million profit before tax.

Riding on the 19% growth in Malaysia’s Total Industry Volume (TIV) for the first half of 2010, Proton sold 39,994 vehicles in Q1, which is 8% more than the corresponding period in 2009. Similarly, revenue rose to RM2.29 billion from RM1.85 billion.

Some of you might have been surprised at Proton’s position in our recent Thai market report post (Exora is the best selling MPV in Thailand), and the company is happy to announce that total exports have increased by 88% (8,303 units) compared to Q1 09/10. This figure takes into account the Gen2 and Persona CKD kits exported to China, which amounts to 60-65% of total exports. In the longer term, the company plans to introduce the Proton brand in China, making the world’s largest auto market its left-hand drive hub.

Proton, which has a presence in 29 countries, is working hard to boost exports as “the domestic market has reached saturation point and exports are needed to increase economies of scale,” according to Proton Chairman Dato’ Sri Mohd Nadzmi Mohd Salleh.

The company is also seeking to establish more CKD operations in other countries to replace the current CBU (except China) practice, as localisation to meet diverse needs is essential. The markets Proton is eyeing are ASEAN, China, Iran and India. The short term goal is to reach 40,000 export units this financial year.

Besides higher car sales, Proton attributed the improved financial showing to the ongoing efforts to rationalise its dealer and support network. Offering value added products/services, consolidation of dealers, increased efficiency and the promotion of the use of genuine parts all led to a 40% growth in revenue from service and spare parts in Q1.

At the media briefing, management revealed that the company is deep in a restructuring process that will see it being divided into four strategic business units (SBU). While not disclosing what the SBUs are (there could be a manufacturing arm and a dealer arm, for instance), it was explained that by doing this, it would be easier to collaborate with other companies.

For example, if company V wants to work with Proton on vehicle assembly, it would be possible for the manufacturing deal to happen without company V buying equity into Proton. V may be eyeing something Proton has, but may not want to manage another brand.

At the event, Proton MD Dato’ Syed Zainal also showed off some very interesting future products and plans. Stay tuned for more!

END OF ARTICLE. Source:

http://paultan.org/2010/08/23/proton-records-rm105-mil-profit-in-q1-growth-in-all-areas/

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DRB-Hicom And Volkswagen Ag To Collaborate On Production Of CKD Models

BERNAMA: August 13, 2010 20:36 PM

DRB-Hicom And Volkswagen Ag To Collaborate On Production Of CKD Models

KUALA LUMPUR, August 13 (Bernama) -- DRB-HICOM Bhd and Volkswagen AG on Friday signed a memorandum of understanding (MoU) to collaborate on the assembly and manufacturing of Volkswagen vehicles in Malaysia.

The MoU will pave the way for Volkswagen and DRB-HICOM to jointly plan the production of Volkswagen models in Malaysia, DRB-HICOM said in a statement.

The pact also included strengthening Volkswagen's existing sales activities and market presence in the country, said DRB-HICOM's group managing director Datuk Seri Mohd Khamil Jamil.

"This MoU is the culmination of intense discussions and both parties anticipate the production of the CKD (completely knocked down) models in Malaysia," he said.

The MoU was signed at Volkswagen Centre in Singapore by Mohd Khamil and Volkswagen's senior vice president, group manufacturing overseas, Dr Christof Spathelf and its head of sales for China and Asean, Soh Wei Ming.

Both Volkswagen and DRB-HICOM have planned that the Volkswagen CKD models will be assembled in Pekan, one of DRB-HICOM's automotive manufacturing facilities in Malaysia.

"We hope the entry of Volkswagen, Europe's biggest vehicle manufacturer into Pekan, would help to spur its transformation into a vibrant and self-sustaining regional automotive hub, as envisioned under the East Coast Economic Region initiative," said Mohd Khamil.

The group will also look at engaging the full participation of its component manufacturing companies, in a move to support Volkswagen's localisation programme, in line with the National Automotive Policy, he said.

"We are looking forward to an exciting future with Volkswagen and we foresee a mutually beneficial and successful partnership, especially in promoting and augmenting the national automotive industry," he added.



-- BERNAMA

Source: http://www.bernama.com/bernama/v5/newsbusiness.php?id=521107 

Editor Chips Yap: chips@motortrader.com.my

 

JD Power Customer Satisfaction Index 2010

Included in the study but not ranked due to small sample size were BMW, Ford, Hyundai, Kia and Mercedes-Benz. Chart source: JD Power Asia-Pacific 2010 Malaysia CSI Study

Decreasing the amount of time needed to service a vehicle or the amount of time customers have to wait for vehicle pick-up has a positive impact on overall customer satisfaction with after-sales service, according to the J.D. Power Asia Pacific 2010 Malaysia Customer Service Index (CSI) Study. 

The study measures new-vehicle owner satisfaction with the after-sales service process by examining 5 factors of dealership performance. In order of importance, they are: service quality, vehicle pick-up, service initiation, service advisor and service facility. CSI performance is reported as an index score based on a 1,000-point scale. Overall customer satisfaction averaged 710 in 2010, improving by 5 points from 2009. 

The study found that 98% of vehicles taken to dealerships for service are serviced within the same day. Among customers whose service was completed within the same day, 67% had service completed within two hours. Overall satisfaction averaged 8 points above the industry average when service was completed within two hours. However, satisfaction averaged 13% below the industry average when customers had to wait 3 hours or more to have service completed. 

Similarly, the study also found that satisfaction decreases as the total vehicle pick-up time, including finishing any paperwork, increases. Satisfaction averaged 24 points below the industry average when customers had to spend an average of 15 minutes or more at vehicle pick-up. 

“Prompt vehicle service and faster administrative processing times are critical elements of the customer experience,” said Taku Kimoto, GM for the Malaysia office at J.D. Power Asia Pacific, based in Singapore. “Dealerships should aim to improve time-related aspects and pay more attention to delivering service in a timely manner in order to enhance customer satisfaction and meet rising customer expectations.” 

Among the 10 brands included in the study, Honda performed particularly well in service initiation, vehicle pick-up and service quality to score the highest points of 736. Following Honda in the rankings were Toyota (733) and Nissan (721). Isuzu improved by 18 points in 2010, compared with 2009—more than any other brand—with its score of 719. 

The study found customers who are highly satisfied with the overall service performance of the dealer have, not surprisingly, higher levels of advocacy and loyalty to both dealerships and the brand. Among customers who were highly satisfied with their service experience at the dealership (service satisfaction scores averaging above 778), 35% stated they “definitely will” revisit their service dealer for post-warranty service. In contrast, only 8% of highly dissatisfied customers (service satisfaction scores averaging below 652) felt the same way. Similarly, 37% of highly satisfied customers said they “definitely will” recommend their service dealer to a friend or relative, compared to just 5% of highly dissatisfied customers.

 

The study found that service quality is the most important factor (38%) contributing to overall customer satisfaction		Service advisors play an important role in ensuring customer satisfaction and need to ensure that paperwork is processed promptly

 

The 2010 Malaysia Customer Service Index (CSI) study measured the overall satisfaction of vehicle owners who visit an authorized dealer/service center for maintenance or repair work during the first 12 to 24 months of ownership. It was based on the responses from 2,653 new-vehicle owners who purchased their vehicles between February 2008 and May 2009 and took their vehicle for service to an authorized dealer or service centre between August 2009 and May 2010. The study was conducted between February and May 2010. All vehicle owners who participated were not from information provided by the car companies and obtained independently. They were thoroughly screened for suitability before being invited to participate. 

JD Power studies have been conducted since the 1970s and are recognized by the industry globally. This is the eighth year that the company has conducted its studies of the Malaysian auto market.

END OF ARTICLE...

Source:

http://www.motortrader.com.my/Cars/NewsHeader/News-in-2010/Local-News/JD-Power-Customer-Satisfaction-Index-for-2010.aspx

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ARTICLE: NAP yet to draw major investments from abroad

The Star Business, Saturday August 7, 2010
NAP yet to draw major investments from abroad
By EUGENE MAHALINGAM
eugenicz@thestar.com.my

THE revised National Automotive Policy (NAP) has not been a blazing success as initially hoped by the Government, as it has yet to attract any significant foreign investments to Malaysia.

“If the question relates to getting global motor vehicle manufacturers to set up new production bases in Malaysia, then it is true that up to now there has been no announcement by global players on such a move,” says Malaysian Automotive Association president Datuk Aishah Ahmad.

Aishah, however, adds that there are several factors investors need to take into consideration before making any investment decisions.

“Whether to set up a base in Malaysia is a business decision which depends on a host of other factors,” Aishah tells StarBizWeek in an e-mail response.

An industry observer who requested anonymity says it is not difficult to see why the automotive industry has not attracted in-flow of investments.

An analyst says industry liberalisation so far has been more focused on the luxury segment, so Proton and Perodua are still protected.

“Everyone out there is only interested to bring in CBU (completely-built-up) units into Malaysia because we are still an attractive passenger car market,” he says.

“With most foreign automotive companies already setting up bases in Thailand and making it their regional hub, it is hard to imagine why anyone would want to uproot to relocate or worst still, to add fresh capacity via a new plant in Malaysia.”

Under the NAP which was reviewed last year, the country’s automotive industry was further liberalised to see a more effective development of the industry.

Among the measures introduced by the Government was to issue manufacturing licence to foreigners for selected segments without imposing any equity condition beginning this year.

This was offered for the production of luxury passenger vehicles with engine capacity of 1,800cc and above, pick-up trucks and commercial vehicles, hybrid and electric vehicles, as well as motorcycles of 200cc and above.

In early March, it was reported that the Government had received “overwhelming response” from foreign luxury car manufacturers seeking further clarification on the NAP.

“The Government has acknowledged that the local automotive industry needs to improve its capabilities and competitiveness to survive in the long term,” says Aishah.

“Local players are encouraged to look beyond the domestic market and to explore partnerships with foreign automakers in penetrating the global markets,” she adds.

Aishah says Malaysian companies should convince their principals on the attractiveness of this form of partnership.

“For non-national makes, this would depend very much on their principals to make such a move,’’ she says.

Nevertheless, the liberalisation of the local automotive industry seems to have kick-started some initiatives.

UMW Toyota Motor Sdn Bhd has announced it plan to invest RM170mil over the next three years to further develop its assembly plant in Shah Alam.

The company also plans to assemble its Toyota Camry model in Malaysia for the local market, replacing the current Thailand-imported units from 2012.

France’s Peugeot has announced its plan to make Malaysia a production hub for right-hand-drive vehicles.

Under a memorandum of understanding between local distributor Nasim Sdn Bhd and Automobiles Peugeot last month, a C-Segment sedan – about the size of Honda Civic or Toyota Altis – is expected to be launched next year.

The car, to be powered by either a 1.6-litre turbo-charged or 2.0-litre engine, will be assembled at Naza’s plant in Gurun, Kedah.

An analyst with a local bank-backed brokerage says the Malaysian automotive industry will not be “completely liberalised” as long as there are excise duties in place.

“Liberalisation of the industry so far has been more focused on the luxury segment, so Proton and Perodua are still protected. Only if excise duties are reduced, then will the NAP have a positive impact.

“If more foreign automakers come in with lower car prices, then it’s good. But so far, none has set up their lines here.”

END OF ARTICLE...

Source:
http://biz.thestar.com.my/news/story.asp?file=/2010/8/7/business/6813393&sec=business

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ARTICLE: Analysts say Proton-Perodua merger won’t solve woes

The Star Business: Wednesday July 28, 2010

Analysts say Proton-Perodua merger won’t solve woes

By JAGDEV SINGH SIDHU
jagdev@thestar.com.my

Perodua deemed reluctant to merge

IT may seem strange that the merger between the national car companies was initially proposed by Perusahaan Otomobil Kedua Sdn Bhd (Perodua) but now, it appears as if Proton Holdings Bhd is the main driver of that proposed union.

Initially, the general view was that such a merger would not help lift the fortunes of Proton. Today, most market observers opine that an amalgamation of both companies may not be in Perodua’s best interest.
A proposal to bring together both car companies was first mooted sometime end 1998 as the local car industry was slowly starting to gain some lost ground after being badly hit by the Asian financial crisis.
The suggestion was made public not by Proton, but by then Perodua managing director Tan Sri Abdul Rahman Omar, who floated that idea as Proton was on the verge of being acquired by Petroliam Nasional Bhd (Petronas).

Cash muscle

The reason for that suggestion by Perodua’s management was simply down to financial strength. The idea was that with Petronas’ cash muscle, a merger between both car companies would lower costs, improve research and development on new models and offer economies of scale once the industry and market improves.
When Abdul Rahman made that suggestion, car sales for the year was poor. Total auto sales in 1998 was 163,000 units and with the recovery in the economy and sentiment, sales rebounded in 1999 to 288,000 units.

National car manufacturers commanded 93% of sales, or 222,000 units, in 1999 with Perodua then a distant second in sales compared with Proton.

That scenario, however, reversed and the idea of a merger with Proton fizzled out in the later years as Perodua overtook Proton and maintained its market leadership of passenger cars sales since 2006 thanks to the Myvi and a growing demand for smaller, fuel efficient cars.

Proton was then saddled with mammoth capacity from its plant in Tanjung Malim and Shah Alam after sales did not match projections that led to the creation of all that capacity.

The reversal of fortunes of the national car companies since then has seen the idea of a merger between the two companies emanate from Proton’s side, the latest being this month after Prime Minister Datuk Seri Najib Razak said at Proton’s 25th anniversary celebration that if overcapacity was an obstacle, auto companies should merge to create a stronger, bigger and more able company.

Those comments set into action suggestions from Proton why a merger would be beneficial as there would be economies of scale, costs would be cut and exports could grow following the merger.

Perodua, however, maintained its stance since becoming the market leader by saying there was little synergy between both companies too seek a merger.

Analysts too have played down the overtures from Proton, saying there was little incentive for Perodua to proceed with a merger given the profit its making and the seeming hesitancy from its Japanese partner Daihatsu to share the money its making with another company.

Analysts said immediate gains from the lowering of cost would not be forthcoming as cars from Proton and Perodua operate on different platforms.

Structural issues

Should a merger materialise out of political persuasion as opposed to financial reasoning, it would temporarily mask the deep structural issues that have plagued the national auto companies over the past decades.
Both Proton and Perodua were created during the wave of industrialisation in Malaysia and as a vehicle of import substitution.

The companies jointly have the lion’s share of the domestic car industry, thanks to high taxes, but that market share has slowly eroded over the years as Malaysia adheres to the Asean’s Common Effective Preferential Tariff agreement between the member countries.

The entry of lower taxed cars produced mostly in Thailand, which has grown its automotive industry thanks to the bureaucratic barriers in Malaysia that drove investment up north, has led to sales of non-national cars rising.

Growing affluence of the middle class, along with the fall in taxes for cars from Southeast Asia and the historical low interest rates in recent years, have allowed households in the country to buy a growing number of non-national cars. Analysts said while the merger could stem the decline in national made cars, it may not solve a sore point of the domestic auto industry, which has been weak export numbers.

Proton sold 160,000 cars during its 2010 financial year ended 31 March, out of which 25,000 were exported. Perodua sold 166,000 cars in calendar year 2009 and a news report said just 2% of sales was shipped out of Malaysia.

It does not need to export as the domestic market has been lucrative for the company over the years.
A merger might not boost exports from Perodua’s models as Perodua needs to demonstrate an ability to be competitive to its Japanese shareholders before being given the greenlight to sell cars overseas.
Right now, it is exporting cars to the UK and it has made a case to export the Myvi, badged as a Daihatsu, to Indonesia.

The future challenge to the small car segment, in which Perodua dominates in Malaysia, will come from Thailand once “eco-cars” start rolling out of production lines in the Detroit of the East.
The need to defend domestic market share would override any export ambition, and one analyst expects that to start in 2012 once Tan Chong starts producing the Nissan March in Malaysia two years from now.
About half a dozen companies have secured eco-car licences in Thailand and exports to Malaysia might grow if manufacturers who hold those licences start exporting those small and fuel efficient cars in greater numbers to Malaysia.

Gaining exports would also depend on model mix of cars produced and newer models would need to be made, and in faster frequency, to gain share in markets where global players are already in fierce competition.
As it stands right now, Perodua produces one new model every two years and Proton’s development pipeline has shown a similar albeit faster rollout of a new model.

The financial commitments needed to compete globally might also be prohibitive given the challenges both companies face in their home market.

With total industry sales for 2010 expected to be a new record at 574,000 units, the incentive for Perodua, which now has about 30% of that market, to proceed with a merger is just not there.

Exports are not as high up on its agenda as Proton and the economies of scale a merger would bring would not be justified right now given the difference in platforms and models both companies are operating with.

ARTICLE: Analysts play down Perodua-Proton merger

The Star Business, Tuesday July 27, 2010

Analysts play down Perodua-Proton merger

By JAGDEV SINGH SIDHU
jagdev@thestar.com.my

They say a merger will only benefit Proton at the expense of Perodua

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) would likely scupper any attempts to merge with Proton Holdings Bhd as there would be little benefit for the second national carmaker to enter that marriage.

Analysts said a merger between the national car companies would benefit Proton and the vendor system more than Perodua, hence creating little or no incentive for Perodua to proceed with the consolidation of the industry.

“On paper it could look beautiful but executing the merger will be very difficult,” said an analyst.
The suggestion that Proton and Perodua should consider a merger was floated after Prime Minister Datuk Seri Najib Tun Razak said at Proton’s 25th anniversary celebration that if overcapacity was an obstacle, auto companies should merge to create a stronger, bigger and more able company.

Proton has since spoken positively about the benefits of a merger with Perodua, with its group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir saying a merger would enhance economies of scale, reduce costs and help exports.

But Perodua has been coy about the whole process.

Its managing director Aminar Rashid Salleh reportedly said there was little compatibility between both companies as they made different car models. The argument of lowering cost of components and economies of scale from the merger does not, however, gain a lot of traction from analysts.

“The key difference and impediment is that the cars from both Proton and Perodua operate on different platforms,” said an analyst. “That makes a merger irrelevant.”
A merger also would not address the poor export performance by both companies. Analysts said a merger would not be the ideal solution to deal with Proton’s overcapacity issue. An analyst said such a move would only mean transferring the problem to another company.

“Proton has ample capacity to spare as its Tanjung Malim plant has not been fully utilised since it was built,” said an analyst.

“Perodua’s expansion in adding capacity has been prudent and tracks the rise in sales the car company has been etching over the past years.”

According to Malaysian Automotive Association president Datuk Aishah Ahmad, Proton’s Shah Alam plant is operating at 54% of capacity while its factory in Tanjung Malim is functioning at just 42% of capacity. Aishah said UMW Toyota Motor unit Assembly Services Sdn Bhd was operating at 215% production capacity, Honda Malaysia Sdn Bhd at 202%, Nissan vehicle assembler Tan Chong Motor Sdn Bhd at 143%, and Perodua at 164%.

‘’Most plants are operating at more than 100% capacity. If you are already full there’s no need to consolidate,” Aishah said in a report last week.

Analysts concurred, saying that Perodua by itself was reaping the benefits as one of the most profitable auto companies in the country. The only way Perodua would consent to a merger was if it were forced to do so, or offered a deal it could not refuse, said an analyst.

A Proton-Perodua merger would, however, solve a long-standing issue of a foreign partner for the first national car as Perodua lists among its substantial shareholders, Japanese carmakers Toyota and Daihatsu.

END OF ARTICLE.

Source:
http://biz.thestar.com.my/news/story.asp?file=/2010/7/27/business/6739072&sec=business

ARTICLE: Optimism on auto sector running high

THE STAR BUSINESS: Thursday July 22, 2010

Optimism on auto sector running high

By EUGENE MAHALINGAM
eugenicz@thestar.com.my

Analysts follow MAA in revising upwards car sales figures for 2010

PETALING JAYA: Analysts are upbeat about the outlook of the local automotive industry for 2010, saying “the current state of the auto industry is one of optimism not seen since 2005.”

“We believe the TIV (total industry volume) will exceed our initial forecast of 546,000 units as consumer and business confidence improves,” said Kenanga Research in a report yesterday.

The research house said it was revising upwards its 2010 TIV forecast to 568,000 units from 546,000 units originally due to the commendable sales performance in the first six months of the year.

The Malaysian Automotive Association (MAA) has revised upwards its 2010 TIV forecast to 570,000 units from 550,000 units initially due to the stellar sales performance in the first half of the year.

File photo shows a woman walking past Proton car models on display at a showroom in Shah Alam. — AP

The TIV in the first half grew 19.8% to 301,077 units compared with 251,305 units in the previous corresponding period.

However, Kenanga said that it anticipated TIV in the second half of 2010 to “normalise” as the period was expected to be “seasonally slow.”

RHB Research, in its report, said it was maintaining its 2010 TIV growth forecast of 9.5% to 587,698 units.
“We are keeping our 2010 to 2012 TIV projections. We expect TIV to grow 9.5%, 4% and 3.2% in 2010 - 2012, following a 2% contraction in 2009,” it said.  TIV for 2009 was 536,905 units.

RHB Research said it was positive on the earnings outlook for local automotive companies, namely Proton Holdings Bhd, Tan Chong Motor Holdings Bhd, UMW Holdings Bhd and MBM Resources Bhd.
It noted that UMW was looking to increase localisation of its Toyota models, in particular the Camry by 2012 as part of the company’s RM170mil assembly plant upgrading programme.

“The Camry is currently assembled in Thailand and selling for between RM144,000 and RM174,000 as a CBU (completely built-up) unit. Once locally assembled, we believe this price would be brought down by at least 5% as import duty will no longer be imposed,” it said.  The research house also said UMW was looking at increasing the local content of its Toyota Vios, which had 40% local content.

RHB Research also said it was optimistic about the launch of Proton’s Waja replacement model in the final quarter of 2010.  The vehicle is expected to be similar to the Mitsubishi Lancer and priced RM20,000 to RM40,000 cheaper than the actual Lancer.

It also said Proton could be consolidating its plants in Shah Alam and Tanjung Malim and secure contract manufacturing to optimise plant utilisation which would further improve profitability via better cost control and economies of scale.

Sales of Toyota vehicles rose to 34,943 units in the first half of 2010 versus 30,147 units previously, making it the market leader in the non-national passenger car segment.  Sales of Proton vehicles increased to 80,051 units from 67,770 units during the same period.

RHB Research said it was also positive on the outlook for Tan Chong (which distributes Nissan vehicles) and MBM Resources (which has a 20% stake in Perodua).  Perodua sold 94,936 vehicles in the first half of 2010 compared with 77,045 units previously, making it the market leader in the local passenger market.
Sales of Nissan vehicles increased to 13,406 units from 11,220 previously.

An analyst from a local bank-backed brokerage said the TIV performance in the first half of 2010 was within expectations, adding that he had revised upward his forecast to 573,000 from 561,000 initially due to the good industry performance.  He said he was positive on the outlook of the local auto industry, noting that many car companies were offering low interest rates to boost sales.

END OF ARTICLE.

SOURCE:
http://biz.thestar.com.my/news/story.asp?file=/2010/7/22/business/6709333&sec=business

 

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Lotus announces new management team and a new Proton/Lotus model

ARTICLE SOURCE:
http://www.zerotohundred.com/newforums/automotive-news/339960-lotus-announces-new-management-team-and-a-new-proton-lotus-model.html




Highlights: The new car will be introduced in about 18-24 months and will be sold as a 5-door Proton in Malaysia and will be sold as a 3-door Lotus in other markets around the world.

It will be based on the Proton Emas concept that was shown in Geneva earlier this year but “heavily modified for daily use.”

In a joint press conference yesterday afternoon, both Proton Holdings Berhad and Group Lotus announced future business and product plans for the respective companies.

Speaking at the conference were Dato Syed Zainal, Managing Director of Proton, Dato Mohamad Nazmi, Chairman of Proton and Dany Bahar, CEO of Group Lotus.

The press conference was also held to introduce a new management team at Group Lotus comprising of some of the most respected names in the automobile manufacturing industry.

Proton Chairman, Dato Mohamad Nazmi, a man known for turning around companies that are in a uncomfortable position, took to the mike first and made the bold move of apologizing for not working closer with Lotus over the past 10 years.



He mentioned that while the previous relationship between the two companies was more on a “ad hoc and contractual” basis even though Proton owned Lotus , he wants things to change under his watch with both companies to mutually benefit from each other. Proton will gain more from Lotus engineering and Lotus from Proton’s ability to produce en masse.

Next on the mike was Dany Bahar, ex-Ferrari Brand Manager and now Lotus CEO who brought us his business plan for the next five years. Of course there was the talk of bigger numbers and newer models and niches, but to help achieve the goal, Dany assembled and introduced a new management team he likens to the Real Madrid dream team.

The list is too large to mention here but trust us that it’s very impressive. Names that would make you go wow though would be the likes of Donato Coco, once Director of Concept Design and Development at Ferrari SpA. His key projects at Ferrari include the 430 Scuderia, Spyder 16M, California, 599XX and the new 458 Italia. Coco takes on the role of Director of Design at Group Lotus. Also in the list is Claudio Bero, ex-Ferrari/Fiat F1 racing chief and now Director of Lotus Motorsports.



The list of key personnel and other revamps goes on but more interestingly Lotus introduced a product outline of an upcoming model that is to take on a new niche for Lotus.

Bahar wants Lotus to “go back to where it already was once,” an engineering and style icon. If you recall, Lotus cars were a sensation in the 70s, appearing in Bond flicks and other Hollywood movies. In his presentation, Dany said he is to take the brand more upmarket in terms of creature comforts, performance, image, and of course, sales figures.

Today’s Lotus is a very niche machine catering to those who want the ultimate driving machine without any compromises; it’s a car that only an enthusiast can appreciate. The Lotus of tomorrow though is set to be much more than just the ultimate driving machine. In his push to take the brand more upmarket, Bahar also stated that he has automakers like Ferrari, Lamborghini, Porsche, Aston Martin right in the middle of his cross-hairs and aims to take these powerhouses head on in terms of drivability, exclusiveness, finesse, and numbrs.



Lotus currently sells around 2,000 cars per year but aims to take it up to over 8,000 units per year and that would mean snatching customers from other car companies. To do that Lotus will have to provide a product that can compete directly with the likes of the Ferrari 458 Italia and California, Lamborghini Gallardo, Porsche 911 Carrera, and the Aston Martin Vantage. Lotus will also continue to build no-nonsense cars like the Exige and Elise.

On questioning, Bahar has confirmed that a new Lotus that will be even more upmarket than the Evora will be introduced towards the end of 2012. He also ruled out the notion of Lotus working on its own engine, insisting that Toyota engine’s work just fine with some Lotus tuning. When pressed for some information on the upcoming, more powerful than ever Lotus, Dany did not rule out the possibility of using Toyota’s V10 powerplant that currently powers the Lexus LFA.

When asked if it would be detuned, Dany simply said, " ... maybe not, maybe it does not even need to be detuned, you just have to wait and see". He did not rule out the use of a V8 or a V6 either.

Also in the works for Lotus is a hybrid powerplant and transmission, an Electric Vehicle, a plug-in hybrid and more interestingly, an alcohol fueled powertrain.

Taking the mike after Dany was Dato' Syed, Managing Director of Proton Holdings Berhad. Dato' Syed spoke about the joint collaboration of the two companies and urged to “forget about the past” as the two companies work towards new goals with the new team. Dato’ Syed also confirmed that Proton will be working with Lotus on a global small car which will carry the “Proton and Lotus image.”



The new car will be introduced in about 18-24 months and will be sold as a 5-door Proton in Malaysia and will be sold as a 3-door Lotus in other markets around the world.

It will be based on the Proton Emas concept that was shown in Geneva earlier this year but “heavily modified for daily use.”



The next five years or so look set to be some of the most interesting for both the companies in recent times. With a very experienced new CEO at Lotus together with a new "dream team" management as well as a new Proton/Lotus vehicle that promises to go further than just a “ride & handling by Lotus” badge, we can only hold our breath for what is to come.

First up, the Paris Motor Show where Lotus is set to introduce a new model, speculations around the internet suggest that it could be a new Esprit, or a new Exige/Elise model, it could also be a Lotus SUV but Dany has said that will not happen, or it could just be a Evora convertible. We’ll just have to wait till early October.

END OF SOURCE.

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300th post: ARTICLE: Proton: LOTUS NOT FOR SALE

Proton: Lotus not for sale at this point in time!

June 9, 2010 at 10:14 am By Danny Tan Filed Under Cars, Local News, Lotus, Proton

With some reports claiming that Proton will offload 40% of wholly-owned subsidiary Lotus to the British brand’s management team, Proton Holdings Bhd has reiterated that Lotus Group International Ltd is not for sale at this point in time. The national carmaker said this in a filing to Bursa Malaysia.

Proton said that it had over the years received several unsolicited offers for a stake in Lotus and had taken cognisance of such offers. The statement added that Lotus would continue to be a strategic entity within Proton and its technology catalyst. However, as a proactive business entity, it said Proton would continue to initiate and consider viable business opportunities and arrangements which would benefit and add value to the group’s interests.

Proton would make relevant announcements at an appropriate time, the statement added. Notice that Lotus is not for sale only “at this point in time” which could also mean that a sale might be considered later on. That’s just pure speculation of course, but should the engineering experts be on the market, there will be no shortage of takers.

Meanwhile, Lotus is set for a brand relaunch, which could be presented at the Paris Motor Show in October. The maker of the Elise and Evora has hired McCann Erickson Central to create a new brand identity, “web solutions” for both Lotus Cars and Lotus Engineering, support materials, a new brochure suite and support for the Paris launch.

SOURCE:
http://paultan.org/2010/06/09/proton-lotus-not-for-sale-at-this-point-in-time/

ARTICLE: Proton-VW deal off...

Proton-VW deal off, new directors to come in

May 28, 2010

KUALA LUMPUR, May 28 — Proton and German auto giant Volkswagen AG (VW) will not get into a partnership, contrary to speculation, but the national car maker is going ahead to appoint new directors to further its business abroad.

Sources told The Malaysian Insider today that Proton chairman Datuk Mohd Nadzmi Salleh will soon announce an end to talks for a tie-up with the German company. Speculation that Proton will strike a deal with VW has been growing after several years on the backburner when two previous attempts failed.

“The deal is off,” a source told The Malaysian Insider today.

Shares of Proton rose 27 sen to hit an intra-day high of RM4.71 but later settled to close RM4.67, a 5.18 per cent increase, yesterday after news of a possible tie-up with Germany’s Volksawagen AG. The market is closed today due to the Wesak celebrations.

Nadzmi said on Tuesday that there would be an announcement in the next two weeks but did not specify what that would be and noted that Proton did not need to form a tie-up.
“Hence, we do not rule out that for the time being, the anticipated tie-up may only be limited to contract assembly or a re-badging of the Passat as the Perdana replacement,” investment bank OSK said yesterday.

It is understood that VW would like to focus on its recent acquisitions — a stake in Japanese car maker Suzuki and its take over of sports and luxury car maker Porsche.

Proton also told Bursa Malaysia yesterday that independent non-executive directors Abdul Kadir Md Kassim and Oh Kim Sun had resigned from the board. It is understood that there could be a couple more resignations to pave way for new directors linked to the car maker’s business ambitions.

Oh is the Proton audit committee chairman while Abdul Kadir sits on the same committee.
The audit committee will now comprise current directors Datuk Michael Lim Heen Peok, Datuk Zalekha Hassan and Behara Venkata Rama Subbu, Proton said in a filing to the bourse.
Sources said the new directors will be able to further the company’s ambitions of going global, an idea that has been dampened by the lack of tie-ups with an international strategic partner.
Malaysian media had reported earlier this year that Proton was in ‘‘intense discussions’’ with global original equipment manufacturers on different types of collaboration.

Managing director Datuk Syed Zainal Abidin Salleh Mohamed Tahir said Proton was talking not only with VW but also with Mitsubishi and Renault for collaboration in engine and products.
In March, it was reported that PSA Peugeot Citroen and Mitsubishi Motors Corp ended talks about an equity tie-up and would instead concentrate on broadening their five-year partnership.
“Peugeot decided against buying a stake in Mitsubishi partly because of concerns that the plan would damage the French company’s debt ratings.

“What they could do is acquire a smaller company, such as Proton,” an analyst was quoted as saying by The Star today.

The national car maker, founded in 1983, has seen its shares trade between RM2.53 and RM5.03 in the last 52 weeks, rising RM1.63 to RM4.67 yesterday, a 53.62 per cent increase in the same period.

END OF SOURCE:

SOURCE: http://www.themalaysianinsider.com/business/article/proton-vw-deal-off-new-directors-to-come-in/

That's all folks, thanks for having the time and patience to read this blog entry...

Friday September 11, 2009

Proton in talks with VW again

By JAGDEV SINGH SIDHU

This time the discussions are likely to centre on collaboration in platforms and engines

KUALA LUMPUR: Proton Holdings Bhd is in talks with Volkswagen (VW) that could lead to a strategic partnership and the assembly of vehicles at the national carmaker’s plant in Tanjung Malim.

The partnership was not expected to see the German auto giant taking an equity stake in Proton but a collaboration in platforms and engines was likely being negotiated, said market sources.

The talks between Proton and VW come at a time when DRB-HICOM Bhd is also engaged in discussions with the German company to assemble cars in Pekan.

“For the long term of the company, it (Proton) needs a partner because the size of Malaysia’s market might not be enough to sustain an independent producer,’’ said UOB KayHian research head Vincent Khoo.

Golf GTI is one of Volkswagen’s popular models in the local market

News that Proton is again in talks with VW is somewhat surprising as both parties have come to, and walked away, from the negotiating table numerous times.

A couple of years ago, Proton came close to inking a deal with VW which would have seen the German company taking a stake in the national carmaker.

A last-minute pitch by the Proton management to build on the company’s own “green shoots” then persuaded the Government from sealing an agreement with VW.

Proton found commercial success following the launch of the Persona but did not escape the global recession caused by the US financial crisis.

Its finances have improved with the launch of the Exora and for its first quarter ended June 30, it reported a net profit of RM54.6mil. The company’s shares closed three sen lower at RM3.71 yesterday.

Now, however, the timing is different.

Proton has maintained it needs a strategic partner but would agree to one on its own terms.

It is also understood that the Government would like Proton to have a strategic partner before the review of the National Automotive Policy is completed.

VW’s interest in Malaysia, too, has grown over the past couple of years after equity stake talks with Proton ended.

It has established its own sales and service business in Malaysia, and as of Sept 7, has seen the number of cars sold reach a total of 2,261 units after 2½ years of operations.

VW is reported to be looking at Malaysia as its sourcing hub for auto components in the region to fulfil its worldwide production and has intimated plans to expand its presence in the country through the local assembly of some of its cars.

Volkswagen Group Malaysia Sdn Bhd managing director Andreas Prinz on Wednesday was quoted by Bernama as saying the group was also thinking of making Malaysia its hub for parts distribution in South-East Asia.

“They will not be looking only at Malaysia’s market but use Malaysia as a sourcing hub for worldwide production,’’ he said.

VW is also interested in assembling cars in Malaysia and Prinz said the company was in discussion with a number of parties.

“Currently, in the automotive industry, everybody is talking to everybody, but we are focusing on CKD,” he said.

Malaysia remains an important market in the region as it is the largest passenger car market in South-East Asia, which is said to be an attractive element for VW.

SOURCE: The Star 11 September 2009 Page 1, Business Section.