PROTON SHOULD TIE UP WITH GERMAN AUTO MAKERS TO BE COMPETITIVE, SAYS ENVOY

AN EXCLUSIVE BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH

KUALA LUMPUR, Dec 2 (Bernama) -- It will be a smart move for any Malaysian
automobile company, including national car producer, Proton, to team up with
German carmakers who have an edge in car manufacturing technology.

German car manufacturers are willing to cooperate and impart their
knowledge, expertise, experience and skills they had acquired over the years,
but it must also be worthwhile for the companies, says German Ambassador to
Malaysia Dr Gunter Gruber.

Explaining why Proton should tie up with a German company, he said: " They
must have a competent and aggressive partner to survive in the highly
competitive and challenging automobile industry.

"I don't have precise information, but I see the automobile industry is
currently at a crucial stage in the industry's history. The financial
implication and latest prices are also not helping the car industry," he told
Bernama in an exclusive interview.

Proton is currently negotiating with a global Original Equipment
Manufacturer (OEM) for a strategic alliance partnership and is confident of
clinching a deal soon.

Proton Managing Director Syed Zainal Abidin Mohamed Tahir said in Bangkok
Wednesday discussions are underway and hopefully an announcement would be made
soon.

He, however, declined to name the OEM involved or German auto giant,
Volkswagen, was the company Proton was talking to.

Syed Zainal Abidin's latest revelation was a clear indication of Proton
forming a partnership with a global player after months of speculation on its
future especially with reports that some Malaysian companies like DRB-Hikom was
keen to take over.

Gruber said Germany had many of the leaders in the international automobile
industry in the likes of Mercedes-Benz, Porsche, Volkswagen and Audi which have
worldwide appeal among motorists.

"We are the leaders in the world but we have to constantly improve our
performance in searching for better solutions in engine combustion. The next
level is car engines without carbon dioxide emissions, meaning using batteries
or hydrogen gas," he said.

He said engines would be a thing of the past, petrol would run out and oil
resources would be exhausted in 15 to 20 years.

As such, Proton, just like any other car manufactures, would be on the edge
of innovation and this would be very costly.

"Even big German companies like Mercedes-Benz and BMW have to cooperate
eventhough they are fierce competitors. They have to collaborate to find new
sources of fuel to power cars. Not a single big company can finance the
initiatives alone.

"So you need partners and if it is worthwhile for a German company to
partner Proton, they will do it, but I don't have any inside information," he
said.

On another note, Gruber pointed out that the Malaysian Government imposed
very high import tax and excise duties on Germany-made cars.

"Because we are the world leaders, we are punished. Our cars here are
three to four times more expensive than in Germany. This is the way Malaysia's
excise duty is drawn up and we accept it," he said.

Gruber hoped there would a free trade agreement between Europe and Asean in
future to discuss high taxes and entry barriers.

International Trade and Industry Minister Mustapa Mohamed, in unveiling the
revised National Automotive Policy in October, had said a new strategic
partnership between Proton and a globally-renowned OEM would be established to
enhance local car manufacturers' competitiveness globally and to ensure
long-term viability.

He had said the partnership could involve equity participation and
technology collaboration and an announcement on the tie-up would be made soon.
-- BERNAMA