Malaysia: Carmaker Proton Keen On Foreign Tie-ups

Malaysia: Carmaker Proton Keen On Foreign Tie-ups

28 Aug, 2008

SHAH ALAM, MALAYSIA: Malaysia's national carmaker Proton reported a stronger-than-expected quarterly profit and said Thursday (28 Aug) it is still keen on foreign partnerships amid renewed interest from General Motors Corp.

In the April-June quarter, Proton posted a net profit of 52 million ringgit (US$15.8 million), rebounding from a loss of 46.8 million ringgit (US$14 million) in the same period last year.

Revenue surged nearly 50% on-year to 1.7 billion ringgit (US$515 million).

It was the fourth straight quarterly profit. The carmaker returned to the black in its fiscal year ended 31 March.

Chairman Mohammed Azlan Hashim said the quarterly profit was due to operational enhancement and strong vehicle sales, which soared 42% from a year earlier to 39,888 units.

For the first seven months this year, sales reached 86,388 units, giving the company a 33.8% share in the domestic market, he said. This was a sharp improvement from its 24% market share in 2007.

"There is greater optimism now for Proton's future. We are working toward a quantum leap in effort and performance. We expect Proton to be able to sustain its performance for the rest of the financial year," Mohammed Azlan told reporters.

He said the company is keen to pursue any partnerships that could boost its market access, sharpen its technological edge and give it the economies of scale. But he declined to elaborate on whether it would relaunch talks with General Motors, which recently voiced interest to work with Proton.

"We are open to any collaboration where we can derive mutual benefit," he said.

Proton in November abandoned alliance talks with Volkswagen AG and GM, partly due to government's reluctance to let foreigners take control of Proton, seen as a national icon.

"Proton's prospects are improving but whatever it is, Proton needs to get married to obtain new technology and access to global markets. They don't have it now to stay in the game," said Rosnani Rasul, auto analyst with MIMB Investment Bank.

Proton Chief Executive Syed Zainal Abidin Mohamed Tahir said the company targets a 34%-35% market share in 2008.

Proton is on track to launch its first seven-seater multipurpose vehicle in the first quarter of 2009, which will open up new markets for the company and boost its export and market share, he said. Proton has traditionally made only five-seater passenger cars.

In the fiscal year ended 31 March, Proton posted a net profit of 202.9 million ringgit (US$62 million, rebounding from a loss of 589.5 million ringgit the previous year.

But analysts said the profit was largely due to a government research grant and previous years tax overprovisions, which were lumped under income. Stripping these out, Proton would have had an operating net loss of 32 million ringgit (US$10 million) for the year, they said. (By EILEEN NG/ AP)