Has Geely fallen Out of Love with Proton?

Just a few short months after China’s Zhejiang Geely Holdings and Malaysia’s Proton inked a deal, giving the Chinese auto manufacturing ...



Just a few short months after China’s Zhejiang Geely Holdings and Malaysia’s Proton inked a deal, giving the Chinese auto manufacturing giant a 49.9% share in the Malaysian minnow, there seems to be the first signs that there are problems. According to reports circulating across the wonderful web, Geely is facing problems and is probably now starting to regret that it only took a 49.9% share for its RM460 million investment. The rumour is that unless Geely actually gets to call the shots in the running of Proton, then it would be ready to walk away from the deal.

So, on the one hand, we have the Malaysian minnow that has never really cared in the past if it has offended an overseas partner or two and, on the other, a company from the PRC where a signed contract seems to be the start of protracted negotiations and not the end.

Either way, what Proton needs right now is clear leadership, but it would seem that Geely has butted heads against crony capitalism, and not the sort that it is used to in China, to the point that the Geely managers are finding it impossible to understand or influence the way in which Proton works, or doesn’t, as the case may be.

Reading between the lines of what most analysts have been saying, it looks like we all expected it to take a minimum of two years for Geely to turn Proton around. Fundamental to the success of this was the introduction of the first Proton SUV (in SUV-mad Malaysia) and Geely has seemingly gifted Proton with the Boyue platform for a mere RM290 million, a bargain for sure.

So for now, there is renewed uncertainty around Malaysia’s Proton brand and perhaps the quiet wish that DRB had made the sale to Peugeot/Citroen, but then again, they too are part Chinese-owned.


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