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Any number of people had predcted Proton to be a failure when it was announced. When especially the envisaged capacity then of 400 over thousand cars a year fell far short of the minimum that was bandied around at that time for a car manufacturer to begin seeing any kind of economies of scale. Vauxhall, the British car manufacturer, at that time was doing something like 600 over thousand cars a year and was barely breaking even.

Anyway, we plunged in thinking we had all the wisdom of the Fords, Toyotas, and Hondas put together when all we had was the brains to maybe put together a wonderful wedding kenduri.

Now we see all the inherent inadequacies and incompetencies finally bursting the seams that were previously constantly held together through unfavourable trade conditions that favoured Proton.

The best option as I can see now is to close the damn thing down or pass it on to some manufacturer who can use the facility to assemble their cars here. At the very least we save a few jobs of workers who trusted the goons who put it all together!

Ah but you see, the real issue now is, how is it going to affect the laymen like us ?

JEFF OOI says: Would you like a scenario where closing down Proton is MORE EXPENSIVE than keeping it going? Look no further than the off-on-off Crooked Bridge as a precedent in precious Malaysia.

Proton can close down for all I care, but I want to know the price we're gonna have to fork out because of them.

Are they going to be given tax money like what MAS has received ? Another bailout perhaps?

More policies to move the stocks by force ? VEOL in the picture ?

For sure, the rakyat can no longer afford to buy any cars at the current time.

Now the middle east is in the beginning of a new fresh round of conflict and the prices of oil are shooting up. If I am not wrong, by end of this year or beginning early next year, there's going to be a fuel hike again, which makes car purchase decision of most households even more unlikely.

Heck, I haven't even bought my first car yet and I have enough to buy it with CASH, YET I refuse to sink any money at all and prefer to save it for rainy days within these few years instead. ;-)

I think the comings and goings at any company is normal. And Kisai has made his fair share of supporters and detractors in his time there.

Decreasing sales at PROTON, as has been commented on another story earlier, is not new. And PROTON's former and current management have both admitted to the causes of the problem.

But PROTON's current scenario is even tougher; amid escalating fuel price, inflation, a more level playing field and cheaper imports.

Copernicus is a good example. Today, even if PROTON were a respected brand on the level of Honda or Toyota, it would be tough to sell the cars.

Its a huge mountain for PROTON to undo years of declining PUBLIC IMAGE of the car. It use to sell because it was the cheapest. Today it is not.

But the damage from the poor quality years and out of date models is really pincing now.

I wish PROTON all the best really. I think they're on the right track, even if the track seem a tad potholed at the moment.

That is right! Copernicus, the only weapon that we small people can fight back is to boycott any unfair purchase; AP easy money. Don’t buy any car if we can and don’t change car if we can. If we have to walk, cycle, or use public transport, please do it.

They have to be pressured to come to a fair deal and anyway we must be wise enough to look after our own money with so many crocodiles around.

I think Proton has to be discussed on 2 fronts.

1. The "Proton Philosophy" - I believe I am not too far off from the fact to say that Proton was probably envisaged as Malaysia's entry into the "technically advanced and industrialised World". Which country wouldn't want it if given a chance? With the right application, we could perhaps one day produce our own spaceships, instead of hitching a ride. Well, Petronas' foray into F1 (seconding engineers, etc) was probably a further step towards the same direction - it's a well known perception that F1 technology is one of the most advanced in the World. Wouldn't it be great if our boys can tap into the knowhow? Sure, maybe the selection of the boys are not "fair"...but that's again touching on APPLICATION. So, I think to lambast Proton as a concept is probably not fair.

2. The "Proton Quality" - now, this front is probably where people has the most gripe about. And quite fairly too. I bought a Waja recently, not because I'm patriotic. But compared to an Altis, Optra and other cars with almost similar space and power - Waja is still value for money. Look wise? Well, beauty is in the eyes of the beholders. Frankly, I have seen unglier Beemers and seriously, the smart car is one bloody ugly crap. Having said all that, Waja's quality is still lacking. By quality I mean the small noises, and the small nigling eletronic failures. Now, if Proton can just put a little more effort and thought into these minor details, the Waja would have been perfect. So yes, on this front, Proton DO HAVE TO GET ITS ACT together.

AverageJoe, I think you underestimate the seriousness of the issue.

Quality is only one of the factors.

Proton symbolizes something that are hated. Cronyism, corruption, monopoly.

It's very existence has derived us of a proper car and has financially imprisoned the rakyat for far too long.

What's happening to proton, besides competition, is also because of the rakyat's hatred towards this very entity.

That's right folks, I will not rule out HATE as a factor towards the company as the reason why it's being punished by the rakyat for depriving them of a proper quality of life.

Because of Proton, rakyat's finances are tied to their exhorbitantly priced rides, even if you buy Perodua, which is still considered overpriced.

The rakyat is deprived of additional cash which would've been useful for improving their quality of life and also the business sector would've benefited from that extra disposable income.

But all that have to go into proton's pocket because of the monopoly.

HATE and CONTEMPT for proton is definitely a powerful motivation NOT to buy proton cars.

The more I listen, the more frustrating it gets. Surely, the mess today is caused by the fact that our own National car manufacturer has lost the trust of Malaysian customers who are prepared to pay a hard earned premium for other peoples cars. What is being done to try to remedy this ? Secondly, if, even IF the trust could be restored, can we have the chance to achieve sufficient volume ? Thirdly, if we still get a positive, how are we going to clear the unsold stocks so that we can look towards a brighter future ?
Conversely, if we cannot carry on any longer, how are we going to get out of this mess ?
These are basic issues, from a simple mind, and the silence is deafening.

Jeff, closing it down is better than letting it go on bleeding the tax payer year after year after year.

If closing proton down can bring down car prices and more disposable income for the rakyat to spend on other industries, it may be worth it.

Letting it continue to bleed is not a solution either, as it will further have a long term negative impact on our economy.

Killing proton, yes it will shock the economy for the short-term, but we're looking at things in the longer term, so it's a necessity.

You either keep your gangrenous finger until it rots the rest of your body or you amputate/cut it off and save the rest.

For me, I will go for the amputation solution.

Let the pain be a short one than a long one that spans decades and affects our global competitiveness and quality of life.

Proton is just one of the many cancer that we have to get rid of in Malaysia.

There's simply no way and no hope of them turning around. It is no different than trying to make Malaysia competitive while still being stuck with the feudal non-meritocratic but heavily racially biased system of values.

It just won't work as long as the basic core values of this country doesn't change, which is revolved around corruption/cronyism instead of meritocracy/excellence.

I have money, I won't buy proton. I won't buy any car at all if I can help it, and I can, because I am used to life without a car.

I definitely won't buy a proton because of issues BEYOND just quality which i've mentioned in this thread.

Proton is more than just low quality, it is a symbol that reeks of contempt from me.

" ... it is a symbol that reeks of contempt from me."
You mean " contempt for me " right ? Agreed.

"Proton is not a new issue. In 1996-97, the Treasury conducted a study on all forms of direct and indirect subsidies (to Proton) and the amount was RM8 billion. It was no longer sustainable even at that period" - Anwar Ibrahim
Check other savvy revealations at:
http://powerpresent.blogspot.com/2006/07/anwar-ibrahims-exclusive-interview-1st.html

And to prove that I am not the only person who has HATRED and CONTEMPT for proton, you can go here and read what others are saying about this cancer entity called Proton.

http://www.autoworld.com.my/forum/allposts.asp?summary=1&Forum=ap469682640&access=1&status=1&Subject=Proton+Component++Makers+Suffering&Closed=&page=2

The key words used by Copernicus to describe Proton were hatred and contempt.

To me, Proton is an additional tax on our hard earned income. Unfortunately, whether you buy a Proton or not, you are subjected to that tax. But who benefits from the tax? Govt and in particular, Umno.

JEFF OOI says: Help our readers. Please illustrate how and why the Government and Umno, as you had believed. The part on the Government being a beneficiary I can straight away understand as Khazanah is a majority shareholder of Proton. But tell us on Umno. A beneficiary of tax, you said.

How many of us are willing to enrich those Umnoputras who are already filthy rich? Count me out.

The Govt has said that they want to keep Proton afloat because of the 12,000 employees (99% bumi) and Proton vendors (99% bumi?).

Is it worth sacrificing the nation's millions for the above "elite" few?

Besides the factors mentioned in previous comments on why some (many?) of us actually hate Proton, I still feel ripped-off by the EON salesmen each time I bought a Proton (back in the 90s) when we were subjected to unfair conditions etc with the connivance of MITI eg the making of compulsory accesories that were previously optional (an oxymoron?.

While Malaysians "muda lupa", I still remember.

As Copernicus and Michael clearly illustrated - the gripe with Proton sometimes borders on emotional. Linking Proton to croynism, corruption and monopoly is almost a non-event. Cos the same accusation can be leveled at Telokom, Tenaga and some dare say UMNO. Closing down something just because one hates it, is hardly a mature solution. It's almost like killing a person just because you don't like him or her.

As I pointed earlier, I still believe the fundamental basis for the creation of Proton was sound. IT WAS (AND STILL IS) THE APPLICATION THAT FAILED.

Car manufacturers lossing money is nothing really new. Even Ford and GM can be in the doldrums. http://www.detnews.com/apps/pbcs.dll/article?AID=/20060718/UPDATE/607180419

Question is, are we smart enough to turn it around? Killing it would be boring.

Follow the money. Whether we buy Proton or non-Proton, the Govt impose all sorts of excise, sales tax on the car. I remember from the Edge that this amounts to RM 6 billion per annum. Of this amount, a sizable chunk of it goes to an elite few via lop sided and sugar coated contracts. Take the case of the crooked bridge, the Govt has to pay RM 1 billion for a cancelled project. That's the link, Jeff.

The Govt is hesitant to cut the above taxes. Firstly, it balances the budget and secondly, it feeds the cronies.

JEFF OOI says: Rhetorics? I am still not clear how taxes on Proton benefit Umno.

Each time Jeff puts up a PROTON issue, we get a lot of response.

I agree with the concept that Copernicus is propogating; PROTON has deprived us of the actual value of the money we paid for the car, i.e. a RM53,000 PROTON may not equate to a RM53,000 experience vis-a-vis the competition.

Yes it does reek of cronysm and nepotism. You can check with Suruhanjaya Syarikat Malaysia on the major shareholders of POOR QUALITY PROTON vendors (the high quality or not quality issue vendors I'll bear with).

Yet in the over-arching concept, PROTON is supposed to present modern Malaysia to the world; develop that vendor system that would push technology to Malaysian engineers, and of course, make cars available to each Malaysian.

But concepts, as they usually do, remain concepts. When corruption play a part, then it all breaks down.

A vendor that gets a job through people that they know instead of what they know in terms of their technology will not have the impetus to improve. Day in, day out, whether the products fail or othereise, they'll get purchase orders from their principal. So where's the drive? Money.

I would like to see PROTON bloom Copernicus. Yes, I do feel cheated with each and every PROTON I owned because of their problems. But it would be a joy to see the current team AND the current government overturn the MALPRACTICES that have led PROTON astray.

To one day not have to really look out for a PROTON on a foreign street before one can see a model would be a proud day for me.

'But it would be a joy to see the current team AND the current government overturn the MALPRACTICES that have led PROTON astray.'

Bahaman, I would like to see that too but how long do you think the poor citizens of Malaysia have to wait? We have waited for more than 20 years now, and it seems that Proton is still the baby that it was, requiring massive Govt support to be sustainable. Frankly, I'm not a patient person and this is especially so when I have to pay for Proton's inefficiencies and failures.

I personally do not think that closing down Proton is a good idea. Yes, I do agree that it does provide jobs and have given birth to spin-off industries. However, do you think that Proton will get any better in Malaysian hands? I think not. The VW deal should have gone thru. All this appeal for nationalism is all BS. If VW can grow Proton than so be it. Mind you, VW has done an excellent job with Skoda, which today contributes immensely to the economy of the Czech Republic. Skoda used to be a joke in Europe but its image has been completely turned around by VW. Hands up, please to those who thinks that Skoda is a German car. Likewise, do you really think that consumers would perceive the Proton as being a German car after it has been taken over by VW? I don't think so. So why the resistance of VW coming into the Proton picture?

"...whose board is currently headed by an accountant who had no experience in the automotive indistry"

Well, this is the same fella who parachuted into the one-time KLSE and right royally "screwed" up the implementation of the so-called converged IT trading platforms. Even signed a JV to do the implementation, delayed, and got screwed over by the French. And I heard it was to screw with with a senior executive with the Exchange. Hindsight tells us it was a poor procurement decision.

His latest stint in Proton brings back memories albeit horrorful ones. He's the government hatchet man.

Apart from quality and vendor issues, Proton screwd up strategically on products. Ir began with Waja continued throughout till this day to satria neo. Hence mahaleel cannot wash his hands. Waja was never or roomy enough to replace wira not too mentioned pricier compared to iswara. Gen 2 again make the same mistake. With the mkt trend tend to favour SUV/MPV , Proton ignored this segment and till today do not have anything in the pipeline. Savvy was never going to be a big seller given the size,a mistake by Proton strategically, especially when perodua launched myvi which is in the same segment but much more spacious. Satria Neo very much hit the nail in the coffin for Proton.

I don't take Umno and bumiputa as the main beneficiaries of Proton too kindly as anyone with any ability to read financial statement of the some of the listed vendors of proton would realised that the non-bumi's benefited as much if not more than the bumis. Being a Chairman or Director does not make you a shareholder. Take Delloyd for example, the company is owned by Chinaman (Tung & Chee Ventures) not bumi even though Nizam Razak & tan sri Hashim mohd ali sit on the board. The same goes to APM which is owned by Tan Chong.

Please stop potraying non bumi as the only victims while the bumis continue milking the country. Both sides benefited. Period

zagato,

I don't know who benefited, and I don't really care about the race etc of the beneficiaries of the Proton saga, but I think most would agree all races suffered :-)

Strategy? I think this word is non-existent in Proton's vocabulary. If Proton ever had any strategy to begin with, it would not be in the state that it is in today. Just look at the mish-mesh line up which Proton has. Its models seem to compete and cannibalise each other. The market for 2-door hatchbacks are so limited here. So how are they going to achieve high sales with the Neo? How about this for a strategy : giving what the people want?

banana, you are absolutely right. Almost all Malaysians are suffering, regardless of race, short of the AP kings. Yep, this includes those who are currently supplying Proton. Everyone is paying thru their backsides for a car. No thanks to Proton and our Govt's protectionist policies.

Proton's fault:

1. At the first place, government should not involved in any business.

2. Protection is never good to business, espcially in long term. It will create 'tidak apa' attidude

Proton should be sell to any company that can give right price. I bet in 5 years time it will be profitable if managed by capable hand

Jeff, IMHO it is not apt here to draw parallels between the cost of closing Proton down vis-a-vis that of the cancellation of the crooked bridge These 2 scenarios are different and represents two entirely unique situations. Firstly, Proton has been in existence for more than 20 years and to me, it has brought more harm than good to this country. The crooked bridge is now but a fantasy and apart from the amount of RM100m (or RM360m) being debated upon as compensation to Gerbang Perdana, we are unsure of what could have been.

JEFF OOI says: But isn't the Causeway 80 years old, and it have brought much incovenience to commuters both ways? Worse, you paid RM1.2b for a bridge that exists only in imagination!

Samarium,
I agree with you that Proton should have closed the deal with VW when they had the chance. Now that Proton has missed the boat, they have to make do with an ex-Perodua guy to clean up the mess. Personally, I feel for the guy for he has a herculean task ahead of him in turning Proton around. From car forums, he actually seems to be making some positive inputs into Proton to date, albeit a tad too little too late.

PS. I knew Skoda is not a German car, but neither did I know it was from Czech Rep. In fact, I thought it was from India! :P

I have always given the Skoda story whenever I root for a share sale in PROTON. Yes, today it is a 101 year old company, which shares platforms with Audi, and is a real value-for-money car.

PROTON, or rather the government is very against this, for many reasons I feel.

Once a genuine carmaker comes into the picture, the reality is half-baked vendors (which probably make up a greater portion of the group) will be affected. The new shareholders are unlikely to take too kindly to non-performing business partners, as it wouldn't be a NATIONAL agenda but a BUSINESS agenda.

Look at what Carlos Ghosn did at Nissan. Nissan to had a similar crony-like system for their vendors. But when Ghosn stepped in, he made the tough decisions nobody dared to make before.

Result? Today Nissan fights at the top, after almost going belly-up not too long ago. It's cars vie for honours, and in its home country, some of its cars beat Honda (X-Trail) for top honours.

We need to reduce government strangle-hold, but alas, this is unlikely to happen.

PROTON, like many GLCs, are a source of funds for the government.

Until and unless PROTON becomes a business entity, and not a political entity, the road may be much tougher than it should be.

Its dwindling share in a half a million TIV market means it needs to go abroad, but acceptance overseas is even more difficult for automakers. Not impossible for PROTON, but very tough.

In short, PROTON's surival as a carmaker rests on some key points:

BECOME AN ACTUAL CARMAKER
- meaning focus on the usiness, and make business decisions based on business input. Politics and national sovereignity, while important, should not be interfering with business success.

HASTEN LINE-UP MODERNISATION
- meaning get rid of the archaic Saga (which is its most profitable model though), and start introducing new, platform sharing models (the Perdana = Mitsubishi 380 is a good move). What a new model line-up does is puts PROTON back on the radar screens of carbuyers, which now give them a miss because of poor line-up.

The MPV development MUST be hastened, and a people's car replacing the Iswara/Saga must go the fast track route too.

AGRESSIVE OVERSEAS PUSH
= meaning getting sales figures overseas to a respectable number. The law of large numbers must apply, i.e. spread existence in more countries, instead of focussing on current markets.

In the UK, where PROTON used to hold court for just a teeny while, an agressive market study MUST be made to identify what the market wants, after which PROTON must identify what the market is buying. Then tailoring its product to the market's current hotshot will allow the marque to eat into the hotshot's market.

QUALITY IS MANDATORY, NOT OPTION
- meaning do a Ghosn. Fire these incompetent vendors, audit low performing staff and move towards a more quality oriented culture. To be fair, Syed Zainal Abidin Syed Mohd Tahir is continuing this move initiated by Tengku Mahaleel Tengku Ariff. But please, "securing" the Superbrand and Most Trusted Brand Awards from Readers Digest just make it seem desperate; everyone knows these things are "sponsored" by the award receivers.

All told, I'm willing to wait. How long more? Let's just say not very long. But what I want does not matter.

The market will decide, and if the market decides for Toyotas, Hondas, Kias and Hyundais, then PROTON may just become a collectors item.

I hope that is not the case in the future.
Bear in mind that in its domestic market, external factors like fuel price hikes and rising inflation, as I mentioned in my earlier entry, needs to be addressed too.

Before going further, I must remind commenter that there is 500,000 job associtate with Proton.

Some people just take the TM way of simple thinking. Closing Proton is the worst cure for the problem. Don't forget we are small country, there isn't enough job for Proton workers. Unlike US and Europe country, 10,000 worker retrench(e.g. by IBM,HP,etc) can easily absorb by the system. And don't forget about 30,000 of unemployable graduates.

Dealing this Proton issues is rather tedious and complete.
for example
- retrench redundant managerial personnel (we know this very well)
- close down redundant showroot
- Throw away SAP because the system are too complex to for company like Proton to find out their weakness. Time for cheaper and simpler ERP,EAM system for Proton.
- Shutdown old plant and convert it to services center. Use PKI to measure the performance, fire any crook personnel that fools around with client cars and parts.
- Impost better security for Proton parts/components, as GLC like Proton are well known for "parts gone missing".
- Establish center for Proton parts upgrade.
- LEASING excessive Proton stock for services industry,e.g. car rental, taxi,hotel,etc. give free services for leased vehicles (as similar to Xerox business)
- Convert some plant into public transport vehicle builiding business.
- Convert some plant for LPG modification center.
- Prepare to roll out DIESEL engine car.
- R&D in making roadster.
- blah blah blah.

500k jobs associated with Proton? which means 1/5 of Malaysia population are depending on Proton to earn a living?

Closing down Proton will not help to solve our problems. Everyone yell and scream for the government to lower car price, and look @ what's happenning now in the car market?

Take a look @ what Telenor did to our local telco market with DIGI in it's hand, and you'll have the sort of idea what VW could had done with Proton, though there is a catch here... Malaysia doesn't have a local telco equipment manufacturer that the government has to protect, as oppose to hundreds of suppliers that are linked to Proton.

Jeff, let's agree to disagree on yout analogy. Peace.

JEFF OOI says: I respect that. Let's agree to disagree.

Morgan, 500k represents 1/5 of the Malaysian population? What are you talking about? The last I checked, the population of Malaysia stands at roughly 25m ppl. 500k is 2% of this. I think you must have mistaken Malaysia with Singapore.