Minister Casts Doubt On Sale Of Proton Stake

As the speculation on the direction of Proton’s search for a foreign strategic partner (FSP) continues, the Second Minister of International Trade and Industry Datuk Seri Ong Ka Chuan has dismissed talks that Proton will sell up to 51 percent of its stake to a foreign company, Bernama reported.

"The government is not relinquishing the country's proprietary rights. We are looking at the opportunities to help Proton grow more efficiently, so that it would be at par with other big brands in the global car industry," he said.

Ong’s comments contradicts earlier statements by DRB-Hicom Group Managing Director Datuk Seri Syed Faisal Albar and Second Finance Minister Datuk Seri Johari Abdul Ghani both of whom, on separate occasions, have openly talked about the readiness of DRB-Hicom to sell up to 51 percent of its stake in the national car maker.

"The government is not relinquishing the country's proprietary rights. We are looking at the opportunities to help Proton grow more efficiently, so that it would be at par with other big brands in the global car industry," Ong said.

He further added that the Government had merely encouraged Proton to seek a foreign strategic partner to boost its global competitiveness.

"The government will not make the announcement on Proton's behalf, and I ask everyone to be patient.

"We hope that after this, Proton will be able to develop a motor vehicle hub which can boost Malaysia's capability to make high-quality national cars which can penetrate the international market, especially in ASEAN countries," he said.

Speaking further, Ong nevertheless conceded that Malaysia’s current annual market of 600,000 cars is insufficient to support a carmaker relying purely on domestic consumption.

Last September, DRB-Hicom Group Managing Director Syed Faisal had revealed that DRB-Hicom was in talks with as many as five car makers to develop a strategic partnership with Proton. He also stated that whilst DRB-Hicom remains committed to Proton’s future in the long run, it was not opposed to the idea of ceding majority control of the carmaker if the proposal is in Proton’s best interest.

More recently, Second Finance Minister Johari was quoted by Bernama in saying that the Government is not opposed to a foreign company taking control of Proton.

DRB-Hicom has steadfastly maintained that Proton’s search for an FSP will conclude by the first half of this year. To date, the company has been silent on the offers it has received as well as the identity of its bidders.

Latest reports, despite often confusing and contradicting each other, have consistently linked China’s Zhejiang Geely Holding Group Co and France’s PSA Group as the two companies persevering with their interests in Proton.

• China's Geely To Take Over Proton's Tg. Malim Plant?
• Proton Likely To Go To PSA Group, Lotus To Geely
• Geely Offering GC9 Sedan, Boyue SUV And Small Car Tech To Proton, Aims RHD Partnership

The search for a foreign strategic partner is one of several terms imposed by the Malaysian Government when it granted Proton a RM1.5 billion soft loan in April 2016.