Monday, November 26, 2007

Can Proton Turn Losses Into Profit Without Foreign Partnership

After a foreign partnership with Volkswagon broke off last week, Proton consistently assured the public that they have found a solution to turns thing around. They do not need a foreign partnership for this and that they are capable in doing so by themselve.

I do hope they could prove a lot of people outthere wrong by turning the table around with their own ability, but doubt it very, extremely much whether they have the ability and resources in doing so. I am not saying they must need a foreign partner to do it, but where their ability and capability lies is in everyone's sight.

Moreover car manufacturer now are more concern about the economical feasibility of fuel consumption for new models, safety of the car produced, joint venture in order to save costs etc, yet Proton had announced to public that they could save their business with their own ability, let alone the money needed for R&D of the new cars, safety improvementof the cars and many more.

In short term, it may seems likely Proton can make things happened. But for how long could they sustain their business in such manner? Can they really compete with other car manufacturers when others have move forward so much so that their product is at least 7 to 10 years ahead of Proton. Can Proton survive with an old technologies then?

I think most people would prefer to pay more for a foreign imported car, rather than saving tens of thousands just to buy Malaysian product, which they know will be of higher running costs over the years, and costs more in operating them.

Proton also referred to MAS in turning around their business from losing millions of ringgits into millions of profit. Do not forget that they obtained such profit thanks to the selling of MAS building and planes. Just how many more buildings and planes MAS has to be sold just to keep the book in black? Is Proton will follow suit MAS in selling their prized assets to keep their balance sheet black? Are they writing off unsold car into scrap to generate income? All these are unknown and before it is properly assess, do not make promises that may backfire at a later stage.

2 comments:

Anonymous said...

I do give credit where credit is due. Unless you have read the Q3 audited report of MAS, you shouldn't jump into the conclusion that profit was made via selling of building and planes. Idris Jala, if you follow his history comes from the Oil and Gas sector. Oil and Gas has been well known for keeping focus on core operations which is MAS is doing right now. If anything, I will say that MAS is really on a turnaround and if Idris continue to be in the driver's seat, it will prove to be a good contender against SQ for being one of the best managed airlines in the region.

M-Factor said...

Fat4, my apology if I jumped into conclusion too early. Like all Malaysian, I do want MAS to continue its resurgent, and hope it will compete with SQ for the best airliner award. In saying so I do want to stress that it's quality that counts, and not the look. I have nothing against MAS, but just would like Proton to be more realistic, and startng its revemp by improving the quality of product, not the look first. They can have the nicest look yet if quality is not there, it is of no use.

Appreciated your comment and again apology for jumping into conclusion months too early.