China’s Geely Automobile Holdings is not going to partner Proton Holdings Bhd after all.
Geely’s president An Conghui told the South China Morning Post (SCMP) that the company, which had been the favourite to acquire a controlling stake in Proton, had withdrawn its bid.
An did not give a reason for the company’s decision to drive away from the bid to partner Proton.
However, Geely chairman Li Shufu had told Bloomberg early this month they were uneasy with Proton’s indecisiveness.
Bloomberg quoted him as saying: “They keep changing, today it’s this, tomorrow it’s that. They haven’t decided what they want.”
The same Bloomberg report said Proton CEO Ahmad Fuaad Kenali had declined to comment on Li’s remarks.
The SCMP reported that Geely, the owner of the Swedish Volvo brand, reported better-than-expected earnings for 2016, with net profit surging by 126% to 5.1 billion yuan (RM3.28 billion).
Geely wants to expand its footprint into Southeast Asia and it was earlier thought that it would achieve this if it were to become Proton’s partner.
With Geely out of the picture Europe’s second-largest carmaker Groupe PSA, which owns the Citroen, Peugeot, and DS brands, appears to be in pole position.
A recent Bernama report, quoting industry sources, said if France’s PSA Group were to buy a stake in Proton Holdings, the company would transform Malaysia into a strategic base to develop and manufacture a new range of cars for the global market.
The PSA Group, the report said, intended to open an Asian research and development centre here.
The decision to seek a partner is mainly due to the fact that Proton has become a drain on owner DRB-Hicom’s earnings and Proton has to be supported financially by the government.
Tourism and Culture Minister Nazri Aziz had recently said Proton was a failure because the company consistently asked the government for “billions of ringgit” in support.
“How can it be successful if every year, you keep coming back to the government asking for money,” the maverick minister was reported as saying.
In February, International Trade and Industry Minister II Ong Ka Chuan denied reports that Proton Holdings would sell 51% of its shares to a foreign company.
He was reported to have said the government was encouraging Proton to seek a foreign strategic partner to boost its capabilities in order to remain competitive in the international market.
Ong also said Proton was in the midst of identifying the right partner and would announce the partnership and the merging of its plants in Tanjung Malim, Perak and Shah Alam, Selangor, simultaneously.
There has been a long line of suitors for Proton. According to earlier reports Renault SA, Volkswagen AG’s Skoda unit, Honda Motor Co and Suzuki Motor Corp were all interested, at one time, in partnering Proton.
Original article from http://www.freemalaysiatoday.com/category/nation/2017/03/23/chinas-geely-applies-reverse-gear-in-proton-buy/
