Friday, 6 April 2007

Proton: The Perfect Basket Case Study

Yesterday, the Star had a surprisingly interesting and candid article on Proton, our favourite national car. Despite the very heavy editing (methink, since some of the paragraphs read so very weird), the piece retained some crucial points that reflected the dismal state that is our national automotive industry. Read it here.


Proton saga continues

…As consumers, all the ordinary Malaysians want is a car of reasonable quality at a reasonable price. Ordinary Malaysians have been massively subsidising Proton and at the end, we still have a company that simply cannot compete against anyone in the world.

An Australian fresh graduate can earn A$2,000-A$3,000 per month and drive a brand new Toyota Camry for A$33,000. A Malaysian fresh graduate earns RM2,000-RM3,000 per month and has to make do with a discounted Proton Saga…

Proton has tried for more than two decades and failed and will fail again if the right things are not done… How can we make Proton globally competitive?

Will the local party have the skills, resources, management, alliances, experience, technologies and a huge host of other critical assets to turn Proton around
(Elanor: just in case, this is a rhetorical question)? Or will it come in and give us a lifetime guarantee that millions of ordinary Malaysians will have to keep subsidising it?

… [T]he whole country and its future are being held ransom to parties that do not bother to explain to Malaysians why there is another missed deadline…

In the first place, should we [even] have a national car (Elanor: again, rhetorical…)? …

Well, not everything is lost – at least now researchers have a perfect natural experiment for an industry-wide economy-wide market failure, with the guinea pigs being 27 millions ordinary Malaysians (suckers) versus a network of 250 thousands politically connected and extremely inefficient auto-players.



Anonymous said...

Wastage happens whenever government subsidies or restrict competition; in Malaysia's case, often in the name of national pride.

Is there a study of the profitability of Petronas as compared to its peers (like ExxonMobil, BP, Shell etc.)? Although Petronas is not a money losing entity---since it is handed-out oil fields for free---it could be the single government-linked company that has "lost" the most as compared to its potential earnings.

Why do conjecture this? Looks at the many billions Petronas has spent on megaprojects like KLCC and Putrajaya with little real financial returns.

To stop Petronas from squandering our national wealth, we should demand the government auction a big part of Petronas to the global capital markets, and keep the profits in a transparent fund for Malaysians.

Anonymous said...

Proton is like Malaysia's version of the Trabant.

Victim of Corruption : The General Msian Public said...

"Malaysian Govt : The Perfect Basket Case Study"