There’s been a lot going on at Proton over the past decade. Despite their many attempts in trying to play catchup to market leader Perodua, it’s all seems as though the slope is far too steep and slippery to climb singlehandedly.

We’re just eight months into 2016, but over the same period of time, Proton’s brainchild, Tun Dr Mahathir, resigned as chairman. A little over a week after his resignation, the Malaysian government handed a soft loan of RM1.5 billion to Proton to pay off some 12,000 Proton employees and 50,000 staff from its vendors. And let’s not forget the management restructuring after the departure of Tun Dr Mahathir and former CEO, Datuk Abdul Harith Abdullah.

Then, just this morning, DRB-Hicom announced that the entire Proton Holdings entity is up for sale, after acquiring a 100 percent stake for RM3 billion back in 2012. However, the sale doesn’t translate to full control of its foreign acquirer. The Star reports that the Malaysian government has the option to take up a 79.28 percent stake in Proton should they choose to convert their redeemable preferential shares as part of the RM1.5 billion soft loan deal.

DRB-Hicom is expecting as many as seven bids by the middle of this month – five named potential parties include Groupe PSA and Renault SA, Volkswagen AG, General Motors, Suzuki and Geely. Of the five, two have spoken their interest in buying over Proton in 2012, and they are Groupe PSA and Volkswagen AG.

2016 Proton Perdana Launch - AutoBuzz.my
Honda is not named as a potential acquirer, and will likely remain so

Many of you may be wondering, who in their right mind would buy Proton, and what good can the takeover do for its acquirer? Well, Proton’s past and current exploits in the export market (both RHD and LHD markets) could potentially spell profit, but this of course depends on the product itself. The good news is, this is backed by Proton’s RM600 million investment into producing Euro6 compliant engines that are scheduled to go into production by 2018.

Although the exact terms and conditions of this acquisition may remain as a corporate secret for now, the most promising deal would likely materialise in a partnership model mimicking that of Perodua and Daihatsu, which has shown considerable success in Malaysia. If such a relationship is established between Proton and its future acquirer, it would provide Proton the springboard to compete on a regional scale, now dominated by the likes of Suzuki, Daihatsu, Toyota and Volkswagen.

This whole process is expected to be done by April 2017. It seems that this time, the disposal of Proton is actually going to take place. Will it be another false alarm? If anything, the news did see a spike in DRB-Hicom’s shares, who is up six sen to RM1.17, so they’re off to a good start. The bigger question now is, who will DRB-Hicom serve the plate to?

Update: DRB-Hicom now denies plans to dispose Proton, but instead says that they are looking for a strategic and permanent partnership required by the RM1.5 billion loan.


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Matthew H. Tong
A straightforward, fun-loving guy who appreciates the superficiality of a car's appeal, but his admiration for anything on four wheels gives him no reason to neglect the makings of a car. He still believes that fun comes with three pedals and a stick.