So it is finally out. China’s Zhejiang Geely Holding Group, which also controls Sweden’s Volvo, is acquiring a 49 per cent in ailing Proton Holdings Bhd from DRB-Hicom.

The Edge (15-21 May) had earlier reported that the government had extended a RM1.7bn credit line to Proton as a stopgap measure. Cash from a RM1.25bn soft loan last year had been fully used up to pay vendors.

But Proton sales have been falling for the last six months despite heavy marketing and three new models:

2017
January – 7,207 cars
February – 6,099
March – 6,070
April – 5,600
Total – 24,976, which is still 5.4 per cent higher than last year, almost in line with the rise in total car sales (but 2016 was a bad year for car sales).

For the first four months, market share was:

Perodua – 35.4%
Honda – 18.9%
Proton – 13.7%
Toyota – 12.2%

And Toyota is poised to move into third place.

Clearly, Malaysia never had a comparative advantage in car manufacturing; so it was a huge mistake to embark on this venture, which has cost the public dearly.

But there is something else we should consider. Check out these two reports:

Financial Review: Petrol cars will vanish in 8 years, says US report from Stanford economist

No more petrol or diesel cars, buses, or trucks will be sold anywhere in the world within eight years. The entire market for land transport will switch to electrification, leading to a collapse of oil prices and the demise of the petroleum industry as we have known it for a century.

(I am not so sure about the collapse in oil prices as China, India and other developing nations will guzzle even more oil as they race to reach the level of affluence in the West.)

The other report suggests people will eventually abandon individually owned cars and turn to ordering transport as a service. We are seeing the genesis of this shift now in the growing use of Uber, Grab and Grabshare.

Tech Xplore: Analysis predicts extremely disruptive, total transition to EV/autonomous vehicles in 13 years

RethinkX, an independent think tank that analyzes and forecasts disruptive technologies, has released an astonishing report predicting a far more rapid transition to EV/autonomous vehicles than experts are currently predicting. The report is based on an analysis of the so-called technology-adoption S-curve that describes the rapid uptake of truly disruptive technologies like smartphones and the internet. Additionally, the report addresses in detail the massive economic implications of this prediction across various sectors, including energy, transportation and manufacturing.

Rethinking Transportation 2020-2030 suggests that within 10 years of regulatory approval, by 2030, 95 percent of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles (AEVs). The primary driver of this unfathomably huge change in American life is economics: The cost savings of using transport-as-a-service (TaaS) providers will be so great that consumers will abandon individually owned vehicles. The report predicts that the cost of TaaS will save the average family $5600 annually, the equivalent of a 10 percent raise in salary. This, the report suggests, will lead to the biggest increase in consumer spending in history.

If these predictions are is true, then they have huge implications for our transport planning decades into the future.

For instance, the Penang transport masterplan is looking at six-lane highways (Pan Island Link) and eight-lane highways, even as population growth tapers off with declining fertility levels while more and more people are turning to TaaS.

The fertility rate in Penang has plunged below the crucial 2.1 mark as people have fewer children.

Has the masterplan adequately studied the impact of this TaaS trend? Isn’t it foolish to plan expensive infrastructure so far into the future when technological advances could render it redundant or underused?

If TaaS grows and private car sales taper off, would that not afford us even more opportunity now for building dedicated bus and cycle lanes and pedestrian walkways?

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35 COMMENTS

  1. During then prime minister Dr Mahathir Mohamad’s visit to China in November 1985, for example, a few Proton Saga were given to a Beijing taxi company as part of the effort to gain publicity for the recently launched Malaysian-made car. Admiring crowds gathered around the Proton wherever it was displayed, astonished that a small developing country like Malaysia could produce its own cars. It was a proud moment for those of us who were there.

    Some 37 years later, here we are desperately looking to China to rescue Proton from total collapse. In 1985, China produced about 6,000 cars annually; by 2008, China’s annual production had surpassed that of the United States and Japan combined.

    Time and again, we seem to have squandered the lead we had through corruption, mismanagement and misguided policies or wasted resources on hair-brained schemes. Worst of all, we never seem to learn anything from our follies because we keep repeating them.

    http://m.malaysiakini.com/news/384039

  2. Sebelum ada Proton, kebanyakkan orang Melayu tak mampu beli kereta.

    Yang pandu kereta adalah drebar untuk taukeh Cina.

    Melayu jangan lupa jasa Tun Mahathir Salam pembentukan Proton.

    Ingatlah betul betul Wahai Melayu sekarang.

    Proton adalah kebanggaan masyarakat Melayu!

  3. Just like the 1MDB, this Proton is certainly not a national asset.
    It does not matter if Proton is 49.99% or 100% sold .
    Can’t use this sale to topple Najib and that is for sure.
    Even if the said 49.99% was considered under valued to Zhejiang Geely.
    And BTW, they are acquiring 51% of the Lotus Cars.
    Anyway, it’s the only “good” thing ever made by the current administration.

    • Geely will perform asset stripping, keeping the relatively new manufacturing facility in Tanjing Malim, the rest could be take over by Geely’s own suppliers or partners in China. This will spell doom to many inefficient and unproductive local workers and vendors down the road.

  4. Proton was initially set-up by Mahathir as a 70% HICOM, 30% Mitsubishi JV.

    But of course, according to Mahathir – 30% owned by Japanese is not selling the country but 49.9% owned by a Chinese company is considered selling the country?

    Remember that Proton sales first started its decline in 2003 while he was still Prime Minster and advisor.

    A short two years later in 2005, Perodua overtook Proton.

    In 2012, Proton was no longer a government company as it was sold to Mahathir’s friend Tan Sri Syed Mokhtar. Mahathir never complained about this sale and instead, he welcomed it.

    In fact, Mahathir, said in a joint interview on Dec. 12 2011 that Proton should be sold to DRB-Hicom — a company he described as being well-run and having the capacity to turn around Proton without undermining its vendors. http://bit.ly/2rn8Huj

    Throughout, Mahathir was still advisor and later made Chairman.

    Mahathir only resigned in 2016 when Proton made huge losses and was unable to pay their suppliers putting tens of thousands of jobs at risk

    The govt had to step in to give a RM1.5 billion soft loan, which Proton immediately used to pay off their suppliers.

    In 2016, Proton made another RM1.4 billion loss and was overtaken by Honda in the local market – falling to third.

    Again, the govt had to extend another RM1.7 billion in loans (on top of the RM1.5b) to enable it to continue surviving

    All in all, the govt put up RM3.1 billion in BR1P (Bantuan Rakyat 1Proton) – or half of all BR1M for the year to bail out Mahathir’s failure.

    And now, when a PRIVATE COMPANY which Mahathir had asked govt to sell to wants to sell a 49.9% stake to a foreign partner in a bid to survive, he now says he wants to cry and blames the govt?

    It is typical of Mahathir to wash his hands of the failure he himself was the architect of and try to blame Najib.

    Typical Mahathir. Always someone else’s fault – never his own.

    When you tried to cheat the Tin Market using MAMINCO, lost billions, raided the EPF and destroyed our number one export then, it was the London Commodity Exchange’s fault – not Mahathir’s fault.

    When the Ringgit dropped 65% from RM2.30 to RM3.80 when you left office and along the way almost collapsed all Malaysian banks, it is Soros’ fault – not Mahathir fault.

    When BNM lost RM30b in the 1990s (RM80b in today’s money) gambling in FOREX, it was the fault of a department head, but strangely never punished nor prosecuted nor named as responsible – not Mahathir’s fault.

    Again, if you want to cry so much that your “child is sold” then why not get your real sons and your friend Daim, who are (among) the richest Malays to come in to buy the 49.9% and make you Chairman again?

    Your son is the sole distributor for Porsche in Malaysia. Why can’t he sell Proton, his dad’s other child, too?

    LSS.

  5. Goverment now more focus on infrastructure developments which can actually benefit the rakyat : Pan Borneo Highway, ECRL, DFTZ and major improvements to public transport. JIBgor is smart to wash the gov hands off past “pride” (kakisong *Hokkien*) like Proton and left it to the caretaking of M good friend who also happens to own similar lost making/ underperformed subsidiaries like Bernas, Muamalat etc. Gov cannot afford to waste tax monies on good to see, no economic value so called kakisong Twin Tower, Formula 1 and reckless takeover of profit making companies. Good to see more money channelled also to young budding entrepreneurs thru start-ups scheme like Magic led by professionals like Cherly Yeoh. Credits to be given if due.

  6. I remember the posters and textbooks envisioned flying cars all over the city in year 2000 when I was studying in primary schools in the 80’s, what happened? nothing special apparently… we still need to build roads for that’s the logic development, not those fancy imaginations of car free city, not in Penang at least, because nobody wants to dump their cars in the sea yet

  7. Sarawak to have LRT ahead of Penang.

    A light rail transit (LRT) system connecting Kuching, Samarahan and Serian divisions could materialise by 2020, according to Sarawak Chief Minister Abang Johari.

  8. Niao kong no need vision. He can see penang city are buying 4wds. 4wds are bigger and wider. As can zoom and omph. So bigger roads are required.

    • Those who live on the hills need 4WD to overcome the slope upwards.
      Drive up to Botak Hill before venture out to Belum or Taman Negara a prerequisite for new adventure seekers.

      • In seeking adventures they detroy the environment with the tracks left behind by 4wd. If d. Livibgstones and bunch of pioneers from secondary sch can walk what adventure is driving 4wd? Paid to do the test drive?

  9. BRT, outstation buses, cycling and walking can serve 99% of all transport needs. Fascists want to prolong their economic tyranny for as long as possible before public desperation becomes too great. Half the energy in petroleum is in the form of petrol which only small engines including cars can utilise. Bitumen (tar) for roads is the lowest-grade petroleum product. The scams include these:
    – Autonomous cars.
    – More “development” in the form of “private” highways, bridges, flyovers, tunnels, etc. based on fake projections.
    – Petroleum price volatility to keep prices high: “nuclear threat” from Iran, invasion of Iraq and Libya, opaque changes in supply, etc.

    • – Also the many ways to increase and exploit car owners: urban sprawl, hire purchase, ‘national car”, taxes and tariffs, convoluted streets, parking, tolls, insurance, repairs, deliberate collisions, etc,

      Some facts the fascist press plays down:
      – BRT was proven about 30 years ago in Curutiba, Brazil.
      – Some enlightened countries have been providing free urban buses for decades.
      – Germany has far more bicycles than cars. Bicycles are making a comeback in China, not because its people don’t want to show off but because they are choking in smog. So, who needs the other party more, Bolehland or Geely?

    • Deconditioned Minister for International Trade and Industry Ong Ka Chuan has confirmed that ‘Gentleman’ Geely Holding Group Co Ltd’s main aim was Lotus when it acquired a substantial stake in Proton, which owns the British marque.

      http://m.malaysiakini.com/news/383564

      It will be very shameful for Proton if Geely could develop sports cars out of Lotus for commercial sale, not just not syiok sendiri prototype model.

  10. When I was young, my uncle talked of his own jetpack. He passed away two years ago and never even got on a hovercraft.

    Chinese as foreign investors have a habit of making a splash initially but unproven long term. SUV alone cannot save Proton. They need a sedan and subcompact to just breakeven, then only can they talk of growth and surviving in the long term.

  11. One Belt One Road strategy to dominate Bolehland economically, and Perkasa no bertindak to show its supremacy to the world?

    • Che Det is lamenting…in his latest blog entry:

      I will die soon. I am already beyond average age. And as I slip into my final years, or month or days, I will watch as our beloved country is sold to foreigners to settle the trillion Ringgits that we owe. We will have to sell more and more of our country.

      What are our assets? Our land of course!! That was what we did in the past. We sold chunks of our country. We lost the land we sold. That is what we are doing now. And that will be what we will have to do – or forfeit our country; like we forfeit Proton.

      Proton the child of my brain has been sold. It is probably the beginning of the great sell-out. The process is inexorable. No other way can we earn the billions to pay our debts. The only way is to sell our assets. And eventually we will lose our country, a great country no doubt, but owned by others.

      I am a sissy. I cry even if Malaysians are dry-eyed. My child is lost. And soon my country.

      Please excuse me.

      http://chedet.cc/?p=2524

    • Even if these Geely cars are cheap, mindful consumers will have to figure in the costs of maintenance (servicing, repairs, high cost of spare parts, road tax + insurance, vandalism, theft).
      If more Ubers are on the roads, safer to ride & at a notice’s call, more people will use TaaS.
      The savings from alternative transport will free up money (purchasing power) for other meaningful spending.

    • Gerakan Youth chief Tan Keng Liang said following the deal, Proton should no longer require protection and the import duty for foreign vehicles should be slashed so that Malaysians can enjoy cheaper cars. Maybe he is wishing for cheap Volvo from Geely built in Malaysia?

    • If maintenance of geely cars are costly what more about 4wd? One one can affordwhat more about youth? So buy houses are like kacang putih

  12. Exactly Anil! I have commented before that autonomous cars will be the future transport.

    Imagine tapping your smartphone to key in your desired destination with an ETA and an autonomous car arrive at your doorstep punctually and ferry you to your desired destination as you sip your coconut juice inside the car while the steering wheel spinning around without any humans turning it (gasp)!

    Crazy future but who would have think that online shopping make any … sense back in the 90s but look what happened now!

    No need stupid tunnel, or whatever 8 lanes highway! And no need to maintain a private car!

    The bad thing is this: those tech giants like Google, Apple ,etc will no doubt have a much larger biz monopoly and control on this world.

    • Go and tell it to your bee n Gomen who regulate transport and give APs. China has been using e bikes for upteen years but we are still riding boon Siew kapcai. If there are auto cars, then the kampong people will be awaken and become sophiscated and you will lose your kangtao.

    • No need stupid tunnel, or whatever 8 lanes highway!
      Q: Where will Niao Kong get more ‘speedy’ money for development (other than highways) if unsavoury swap deals of highways + tunnels with developers’ high-priced property development on gomen lands / reclaimed lands are shelved???
      Niao Kong only has night vision (like in a tunnel), not future bright vision for Penang.

      • If no highway, you want to spend one day trying to get to the airport with 4wd joining local suburb cars? Or taking one day trying to get out of pg island? Try taking the ferry if there is no pg bridge.

      • Use your head, zoro.
        Whinning loads of stuffs that benefit no readers here is your typical hobby.
        I move around in Penang, no problem, just use experience of short cuts away from traffic jams. 4WD or small car. Who needs more highways?
        What’s your problem? Imagined from outside Penang?

        Now, try harder to spin my words for more limited Komtar Dedak, pls try harderrrrr!

  13. “Proton will always remain a national car and a source of pride, as Proton will still have a majority hold of 50.1%. Our very own much-loved brand now has a real chance in making a comeback, a huge one I hope”, Malaysia’s Second Finance Minister Johari Abdul Ghani said at a press conference to announce the deal.

    What will happen to the local bumiputera vendors if Geely chooses to use its own supply chain from China? Expect Perkasa and Rani Kulup to make noise soon?

  14. Electric car not necessarily environmentally friendly if the electricity is generated using fossil fuel, not hydro, wind or solar.

    Proton has no resources nor expertise to go into electric car. Geely is likely to use the underutilized Proton factory to manufacture it’s branded vehicles ultimately.

    Najib has no emotional ties with Proton, another fallen legacy of Mahathir?

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