Dr Mahathir: Key elements to decide Proton-Perodua merger

Perodua is not quite a national car, it's much more of a Japanese car company, says Tun Dr Mahathir Mohamed, adding that whether the Japanese agree is another matter. 
 
There are several key elements that must be considered before a potential partnership between the country's two largest carmakers Proton Holdings (5304) Bhd and Perusahaan Otomobil Kedua Sdn Bhd could materialise, says Proton adviser Tun Dr Mahathir Mohamed.

"There has been a lot of talks, and the only thing I know is that there has been a lot of talks.

"We are two different bodies. This is a national car company, Perodua is not quite national, it's much more (of a) Japanese car company. So, whether the Japanese agrees or not, is another matter.

"But, we like to cooperate with people in the same field of business as much as possible, and I think if we do cooperate, there will be some savings as well as some sharing of information.
"Of course, most companies like to keep things close to their chests, they do not like to reveal secret and we do not want to tell them our whole secret also. So, there must be a good balance of understanding on how much we can tell them and so forth," said Dr Mahathir in Shah Alam yesterday, without saying if he is with or against the idea of possible consolidation.

Currently, the government is in talks with both car companies and is obtaining feedback from the car- makers as well as other industry players. The government is expected to deliberate on the outcome before making a recommendation to the Cabinet some time at the end of this year.

Proton has been on the lookout for a strategic partner for some time, to partially help absorb the excess capacity at its plant in Tanjong Malim, Perak. The plant is running at only 150,000 units a year. Its designed capacity is one million units.

Dr Mahathir was speaking to the media after witnessing a signing ceremony between Proton and University Teknologi Malaysia (UTM) on a professorship programme.

Through the partnership, which will be for a period of two years, a UTM professor will be directly involved in the development of new generation Proton cars.

"Many key performance indicators (KPIs) have been put in place. Among the things under the KPIs include the number of research that has to be done yearly, as well as on human capital development," said Proton group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir.

He expects commercialisation of the results of the research works to be as early as second half of next year. Under the Proton-UTM Professorship Programme, UTM will be investing RM1 million, while Proton is allocating RM500,000 to run activities organised within the first year of the programme.






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