By AFIQ AZIZ / Pic By ISMAIL CHE RUS
PROTON Holdings Bhd’s vendors are expected to meet Prime Minister (PM) Tun Dr Mahathir Mohamad today to discuss their next move and chart their future in the wake of challenges that are anticipated in the automotive industry.
A vendor, who declined to be named, told The Malaysian Reserve (TMR) that the meeting, led by the Proton Vendors Association (PVA), is expected to discuss the joint-venture (JV) company deals between local vendors and the existing of semi knocked down (SKD) vehicle automotive suppliers.
“We are trying to address a bigger issue such as the JV with China’s Zhejiang Geely Holding Group Co Ltd’s suppliers, as what has been supported by the PM and agreed by our principal.
“We should establish the JV company soon, involving both parties with some government incentives, to allow local players to penetrate the Chinese and Asean markets.
“However, we not iced that Geely’s suppliers are reluctant to cooperate and we need to discuss why,” the vendor said.
Proton, which is 49.99%- owned by the Geely, had last year asked for a 30% price reduction from its suppliers as part of the company’s turnaround plan.
TMR earlier reported that the ultimatum was given in return for future businesses that are guaranteed to be awarded to the vendors.
The vendors, however, defended that they were not profitting from the deal as Proton did not meet the request for quotations, which had also affected their productivity.
Last month, Proton, PVA and Proton Edar Dealers Association Malaysia (PEDA) had a meeting with the Council of Eminent Persons.
After the session, Proton chairman Datuk Seri Syed Faisal Albar Syed Ali Rethza Albar told the press that the company is following up on the progress of the matter.
He, however, could not determine how many Proton vendors would be able to tap into the JV firm opportunity.
The source said local vendors had sent a request to the Chinese counterparts for some responses, days after Dr Mahathir announced his support for Proton’s local parts manufacturers and the JV.
“We will further discuss this issue with the PM at the meeting,” the source said.
Apart from the JV firm issue, the delegation would also propose on protection mechanisms that could spur better growth for the local automotive manufacturing industry.
According to another report by TMR, the existence of some SKD car manufacturers in the market and its unsustainability would not contribute to enhancing the local automotive manufacturing growth.
“These assemblers must be monitored as they do not provide the high multiplier effects in the automotive ecosystem,” the vendor claimed, adding that the group will also look into the possibilities of reducing exported parts from countries that do not purchase Malaysian cars.