Proton's reset to go international begins in earnest

Dr Li Chunrong, who takes over as Chief Executive Officer (CEO) of Proton Holdings Bhd's manufacturing arm, comes armed with global automotive credentials that make him to be the best man for the job to turn around Proton and penetrate ASEAN in a big way.

With 30 years experience in the auto sector and having worked for major automakers such as Honda Motor Co., Kia Motors Corp. and China Dongfeng Motor Group, he will be well-placed to bolster operations at Proton.

The changes at Proton will be positive by way of protecting the jobs for the locals, facilitate transfer of technology, introducing new models, injecting cash, as well as improving sentiment in the local supply chain, among other things.

Responsible for the entire operations of Proton, Li spelt out a 10-year plan to revitalise the national carmaker and vowed to make Proton among Southeast Asia's top vehicle brands.

In a way, Sept 29 may well go down as the date when Proton got its act together, bit the bullet and started thinking like an international class auto corporation.

Although DRB-Hicom Bhd, which owns 50.1 per cent in Proton, and Zhejiang Geely Holdings Group (49.9 per cent), did not announce a new car model, but more importantly was the choice of a new Proton CEO and management line up.

In an instant, Proton switched roles from a standalone, domestic car manufacturer with only one primary market - Malaysia -- to become part of an international auto group whose stable includes several well-regarded auto marques -- Geely in China, The London Taxi Company of Great Britain and Volvo of Sweden.

This instant transformation vaulted Proton into its long-awaited role to become an international auto player within a stable of globally known brands which share technology, design, parts, platforms and marketing know-how.

Belonging to a stable of several marques that specialise in specific market segments, geographic territories and pricing points, is an automotive business model well proven by the likes of Volkswagen, Peugeot-Citroen, Nissan-Renault-Mitsubishi, Mercedes and BMW.

Together with Li as CEO, the announcement included a high-profile auto personality joining the board of Proton.

That man is auto veteran Winfried Vahland, who was Chairman of the board and CEO at Skoda Auto, a wholly-owned subsidiary of the Volkswagen Group.

Vahland is credited with turning Czech Republic's auto brand, Skoda, into a respected global marque.

So, not only is Proton manufacturing now led by a CEO from Honda, Li is being helped at board level by an ex-CEO from Volkswagen Group whose turnaround experience with Skoda is almost a mirror image to what needs to be done with Proton.

So obviously, the leadership is in place not just to make Proton the number one car manufacturer in Malaysia but beyond domestic shores.

As Li clearly said in his first media announcement, he was squarely looking at the promising ASEAN market of 600 million people for Proton to become among the top three regional brands and then move on to make Proton a full-fledged international player.

With this move, Geely with its 49.9 per cent stake will begin the transformation of Proton by pouring in technology, European Union Euro 6 compliant engines, a boost in parts quality and the just-in-time injection of an entire model transfer- the Boyue sports utility vehicle, which is missing from the Proton model line-up.

Both bankers and auto analysts are united in their assessment that DRB-Hicom and majority shareholder, Tan Sri Syed Mokhtar Al Bukhary, did the right thing to search for right strategic partner, an idea backed by the highest levels of the Malaysian government.

Geely's injection of cash is not what matters most.

Instead, what is of value will be Geely's contribution of managers, technology, new models, global marketing network and platform sharing, which saves Proton from spending billions to uplift it from local to global player in one swift move.

DRB-Hicom made a good deal on many levels, for instance, protecting jobs by taking on a global partner rather than going it alone and inevitably sinking under year-on-year mounting losses in the billions of ringgit.

Supplier network is kept intact, now ready for its own quality improvement makeover to meet the most stringent international standards and gaining inroads into a global network of brands that include Geely, Lynk

Looking ahead, Proton's staff, suppliers and Malaysians in general now can see that Proton is going international at last, a move that has been a long time in coming and one that will lift Malaysia's automotive sector to new heights.