Proton Malaysian Automobile - Non Profitability

COMPANY BACKGROUND

Proton is a Malaysian automobile manufacturer headquartered in Shah Alam, Selangor, with a manufacturing plant in Tanjung Malim, Perak. Founded in 1983, it was Malaysia's only carmaker until the establishment of its competitor Perodua in 1993. Its name is a Malay acronym for PeRusahaan OTOmobil Nasional (English: National Automobile Enterprise).

It is a core member of Proton Holdings Berhad, the holding company which is listed on Bursa Malaysia. Over 42% of its equity is owned by a government-owned company Khazanah Nasional Berhad, making it government-linked. Proton was public listed on the Kuala Lumpur Stock Exchange (KLSE) in 1992.

Proton's main function is to manufacture, assemble and sell motor vehicles and related products, including accessories, spare parts and other components. Besides that, it is also involved in financial services and property management, as well as operating as an investment holding company. Operations are carried out in Malaysia and other countries, including Asian, China, Indian Subcontinent, the Middle East - North Africa, the United Kingdom, Western Europe, Australia and South Africa.

Based on technology and parts from Mitsubishi Motors, production of the first model, the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained

PROTON produced Malaysia's first car, the Proton Saga, which was commercially launched on 9th July 1985. Later it line up include the WAJA, SATRIA GTi, WIRA, ISWARA, ARENA, PERDANA V6, JUARA and the latest are New Saga and EXORA.

Shah Alam factory operate with an area of 923,900 sq metres. It was originally designed for a capacity of 80,000 units per year. In 1997, capacity increased to 230,000 units per year with the construction of the Medium Volume Factory which is next to the Main Plant. Now the Shah Alam factory is capable of producing 240,000 vehicles per year.

Five times larger than the Shah Alam plant, the Tanjung Malim manufacturing facility, Costing RM1.8 billion and occupying 1,280 acres, houses five main complexes; the engine shop, stamping shop, body shop, paint shop, and trim and final shop. Fully operational, it is capable of producing up to one million vehicles per year, five times the capacity at Shah Alam that is limited to 230,000 units per year.

The group's primary national policy objectives are:

1) To spearhead the development of component manufacturing industries,

2) To acquire and upgrade technology and industrial skills within the automobile manufacturing industry and

3) To strengthen the international