Proton partnership delay leads to trouble at home

The Malaysian Proton car dealers may go bust if the government fails to develop a foreign alliance for the national car maker.

Currently 180 Proton dealers have had losses over 20 million ringgit in the last financial year. This is due to the market share dropping from 60% to 30% with the arrival of more foreign car makers.

The Malaysian government has been trying to make an alliance with either the Volkswagen Group (as discussed in a previous article) or General Motors. Neither company has been successful, but the government claims that negotiations are still in the works.

"We are pleading to the government to decide immediately on the foreign partnership and future of Proton before the collapse of the dealers' network," Said Wan Ahmad Sepwan, the association president told reporters.

With more Malaysians buying imported vehicles due to trade agreements with surrounding nations Proton is expected to lose 700 million ringgit in the current finical year. This is a result of Proton dealers selling an average of 10 cars each per month, while the break even is 40 cars.

With the company in troubles the dealer network is also looking to be consolidated, but a foreign partner will increase sales locally and give Proton a reach into global markets.