Perodua Consolidation, Is It Worth to Merge with Proton?

Prime Minister Datuk Seri Najib Razak (right) had mooted an industry merger if excess capacity was an issue. — file pic

KUALA LUMPUR, July 25 — Merging Proton and Perodua into a single entity will be a step forward to boost the Malaysian automotive industry, according to the Proton Vendors Association (PVA).

Its president Datuk Dr Wan Mohamed Wan Embong said it would be timely for both national car manufacturers to look at the positive impact of consolidation as this could help the automotive industry to expand globally.

"From our perspective, we need to look at the future rather than today because moving forward, the industry will definitely face great challenges," he told Bernama in an interview.

"In fact, the global economy will be very challenging, full of uncertainties. Even though some say challenges are opportunities, there is pressure to perform," he said.

It was reported earlier that the government has signalled the need for a merger in the automotive industry, especially between Proton Holdings and Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

In giving the association's views, Wan Mohamed said that "firstly we need to look at positive side".

"Today Proton is so much better than three years ago and we have to thank the management as the company made a turnaround last year," he said.

"We believe that they are going to do better this year, just ahead of the new model line-up planned for Proton."

Wan Mohamed said that Proton's share in the domestic market was also increasing rapidly.

"Three years ago, Proton was at 27 at 28 per cent and recently it was close to 30 to 31 per cent in the domestic market based on the total industry volume," he said.

"Based on the production forecast, Proton will produce over 200,000 cars during this financial year (March 2010 to March 2011)."

According to Wan Mohamed, one of the major advantages of Proton is that currently it has spare