Former PM Tun Mahathir should not have slammed the appointment of Dr Li Chunrong as Proton CEO by Zhejiang Geely Holding Group and DRB-Hicom, because he once said the “Look East” policy should be extended to include also China.
So, we should learn from the Chinese and there is nothing wrong having a Chinese national to run a Malaysian company.
The government has during the past 34 years injected a total of RM15.3 billion into the national carmaker, but the effort has not been paid off. Now that the government is short of cash, it is natural that such a losing business must be disposed of soonest.
Moreover, Geely does not come in as an unconditional savior; it has hoped to exploit the Proton platform to make significant inroads into the 600-million strong Asean market.
It’s impossible to bring Proton out of the current doldrums if the existing management is still in charge. So, let the Chinese take over, and perhaps the Chinese way of doing business can resuscitate Proton and put it back on its feet again!
But, Proton has its share of problems. Li has set some goals, including a turnaround for Proton in three years and making it a profitable business in five years. In addition, he also wants to make Proton the country’s as well as Asean’s top automobile brand.
Can all these become reality? I browsed through media reports on Geely and discovered that its founder Li Shufu is a very ambitious entrepreneur with a globalized outlook. In 1995, he acquired a small government-owned manufacturer on the brink of bankruptcy in Sichuan, before he set up Geely in Hangzhou in May the following year. A veritable rags-to-riches success story.
In March 2010, Geely acquired Volvo for US$1.8 billion. Many were skeptical of the purchase but in 2016, Volvo’s global sale hit an all-time high of 534,000 units, up 10% y-o-y as profits jumped by a robust 66%.
Although Geely is in full control of Volvo’s stake, Volvo’s engine has not been transplanted wholesale to Geely cars. In its stead, Geely personnel were sent to the Volvo plant to learn its high-end automotive technology.
If Volvo’s engine were to be adopted wholesale in Geely cars, the price will swell by 20,000 to 30,000 yuan each. And such a move will also hurt the Volvo class.
Geely has three R&D centers globally: the Hangzhou center hires 8,000 automotive engineers, the Gothenburg center has 2,000, with another 8,000 at the UK center.
Geely sets its sights on the enormous world marketplace and aspires to sell three million cars annually by 2020 to be among the world’s top ten manufacturers.
Li Shufu once said, “We cannot count on our competitors to help us fulfill our goals. We have to grow strong ourselves in order to compete fairly and transparently with our competitors on a global level with a scientific and confident attitude. This is our only way to stay strong!”
Put that kind of attitude alongside Proton and we will instantly see the difference between what makes a winner and a loser.
Proton has for so many years come under the government’s patronage. It has been making hefty losses year after year despite the acquisition of Lotus.
By contrast, Geely is a private company that booked itself a place in the coveted Fortune 500 list for a sixth consecutive year in 2017 with a turnover of US$31.4298 billion at 343rd, up 67 places from a year ago.
Geely’s edge lies entirely with its intelligent leader.
Given Li Shufu’s macroscopic marketing outlook and enterprising spirit, along with Li Chunrong’s two decades of industrial experiences with Honda, Kia and Dongfeng Motor, it makes sense to believe that Geely can help turn Proton around.
Whether Proton will eventually emerge as a top regional brand will depend very much on the coordination from its staff and suppliers.
We can see in Li Shufu undying spirit, astounding courage and enviable efficiency typical of many successful Chinese entrepreneurs. Now that many Chinese companies are rushing to make a landfall in Malaysia under the “One Belt One Road” initiative, if we remain complacent and contented, we will not be able to compete with them, and will go down like Proton.
The Chinese are getting stronger by the day, if we can’t beat them, join them and learn from them, as this is our only way to survival and further progress.