“Mahathir went ahead and sanctioned the purchase of a majority stake in Lotus despite knowing the British carmaker was in dire straits and had been tossed around the automobile industry”
The Third Force
Proton Holdings Berhad (Proton), established in 1983, was the brainchild of former Malaysian premier Dr. Mahathir Mohamad. The national-badged automaker, long reputed for its ties with the Mahathirists, hit a snag when sales began dropping just before Mahathir handed over reins of government to his deputy, Tun Abdullah Haji Ahmad Badawi, in October 2003.
In April the following year, the then International Trade and Industry Minister, Dato’ Seri Rafidah Aziz, earned Mahathir’s ire when she told Proton to speed up its search for a foreign partner. Her call was made days before Mahathir was named Proton advisor, a move that shocked many, including senior DAP stalwart Lim Kit Siang.
In a blog posting dated 4th of September 2004 (READ HERE), the senior Lim pointed out that Mahathir was “the most ardent opponent of selling Proton stake to foreign company.”
“Mahathir subsequently gave a long interview with The Edge defending his failed nationalist policy by making a clear pronouncement that he would like to see Proton remain under the control of Malaysian investors.
“Proton was spared from the pressure to look for a foreign partner for a good three-month period,” he said.
According to the senior Lim, Mahathir was inspired by economic models from Japan and Korea where car industries served as engines of growth.
“The hope was that Malaysia would eventually build a viable automobile sector that export cars to the world market like Japan and Korea,” he added.
But that was never meant to be.
The fact is, the national carmaker faced ineluctable losses owing to some bad moves that led to a disproportionate cost-production ratio. Many point to a decision by Proton to acquire a majority stake in Lotus cars – a British sports car manufacturer headquartered in the United Kingdom (UK) – as the straw that broke the carmaker’s back.
While that remains true, not many are aware that Mahathir sanctioned the purchase of a majority stake in Lotus despite knowing the British carmaker was in dire straits and had been tossed around the automobile industry.
What’s worse, in a recent blog posting by Lim Sian See (READ HERE), it was revealed that the British automaker had lost an estimated RM6 billion the past 20 years and RM920 million in 2013 alone. These are among reasons that prompted the current administration to draw the line.
On Wednesday, 24th of May 2017, Proton undertook in an agreement with China’s Zhengjiang Geely Holdings Co Ltd (Geely) to part with 49.9 percent of its stake to pave the way for Geely’s involvement in the national automobile industry.
The move is likely to free Proton from perpetual government subsidies by remedying the lopsided cost-production ratio that the Mahathir administration inflicted the national carmaker with since the 1990’s.
According to the MP for Setiawangsa, Dato’ Ahmad Fauzi Zahari, even if Proton were to secure just one percent of the Chinese market through its partnership with Geely, the sky would be the limit.
“Just imagine the thousands of new jobs to be created for Malaysians,” he said.
But that doesn’t seem to be what Mahathir wants.
In a blog posting featured by the opposition leaning Free Malaysia Today (FMT) on the 25th of May 2017, the former premier bewailed the “loss” of Proton, saying the sale of the national carmaker was the first step towards the eventual sale of Malaysian assets to foreigners.
“They say Proton is my brainchild. Now the child of my brain has been sold. Yes. I am sad. I can cry. But the deed is done. Proton can no longer be national. No national car now,” he said.
Ironically, this is the same Mahathir who, following a failed 2014 bid to woo Geely into a partnership with Proton, sought the assistance of Tan Sri Syed Mokhtar Al-Bukhary to revamp the national carmaker by seeking investments from abroad.
Does Kit Siang not have anything to say about this?