LOTUS AND MV AGUSTA WAS NOT A MISTAKE.

Image from Malaysia-Chronicle

I read with interest Mohd Khairil Azman posting in FMT at HERE that had gone viral and I made references in this article to his 3 questions but first let us go back to the fundamental of the national car project.

It is interesting to observe how Malaysia national car projects had evolved from first the Perusahaan Otomobil Nasional Berhad, PROTON in the early 1980s and then Perusahaan Otomobil Kedua Berhad (Perodua) in 1992. Both national car projects were mandated to achieve 1 clear objective; to be able to design, develop and produce our own car as part of our industrialization program to achieve the vision 2020.

Proton's journey has always been in that direction, Perodua which was also Tun Mahathir's project that was approved by cabinet in 1992 was given the same mandate as Proton. This was clearly stated in Tun Mahathir's speech as the Prime Minister then, when he launched Perodua manufacturing plant in Rawang; 2 years after the cabinet approves the 2nd national car project. Tun Mahathir's speech can be read at HERE.

With both Proton and Perodua non-competing in different category, there were sufficient sales volume for both companies to slowly acquire technology and engineering capability to achieve the government's vision and objective. With the proceeds received from those sales, Proton reinvested by acquiring technology through Lotus and MV Augusta and build its RM1.8 billion Tanjung Malim plant.

Proton acquired Lotus in October 1996, a year before we were hit with the worst recession in 1997 which halted whatever plan Proton had for Lotus. When the economy recovers, Lotus engineering has been part of Proton cars ride & handling but not many had driven the lotus to actually feel it in Proton. The Lotus engineering too is the catalyst behind the new engine nicknamed Volcano that was recently launched in January this year. (More information at HERE). Lotus was acquired for its engineering capabilities as well as support and it has contributed to the development of Proton cars. Whether Proton did have a turn around plan for Lotus cars itself remain unknown when the architect of its acquisition, Tan Sri Yahya Ahmad died of helicopter crash (more information at HERE).

KHAZANAH NASIONAL TO BE BLAMED FOR PROTON'S DOWNFALL

Dato' Abdul Rahman Dahlan said in an article posted by the Star, (an extract of which, was posted at the bottom), that Dr M must answer for Proton's colossal failure; I feel the need to clarify.

1. Proton was the no 1 car maker when Tun Mahathir was the Prime Minister. 

2. Proton went downhill under Tun Abdullah Badawi premiership whom was also the Minister of Finance, the holding company of Khazanah Nasional whom was at that time, the biggest shareholder of Proton Holdings Berhad. Dato Mohammed Azlan Hashim was appointed by Khazanah Nasional as Proton Chairman and was tasked to remove Tengku Mahaleel as Proton Managing Director.
3. Dato Mohammed Azlan Hashim succeeded in removing Tengku Mahaleel when his predecessor, also a Khazanah Nasional appointee Dato Abu Hasan Kendut had failed. When Tengku Mahaleel was removed, he left Proton with RM4b in cash reserves.

4. Proton lost to Perodua as the number 1 car maker under Dato Mohammed Azlan Hashim when Khazanah Nasional was the biggest shareholder and in control of Proton.

5. Khazanah Nasional, via Dato Mohammed Azlan Hashim had reversed Tengku Mahaleel's decision to terminate EON as Proton distributor when EON refused to contribute to the R&D funds requested by Proton after the government stopped giving R&D grants for proton development. 

6. This resulted in a sales network with more than 400 dealers representation in Malaysia. This was the most destructive decision that weakens the once a strong dealership network and the start of a series of catastrophe.