PROTON Holdings Bhd’s bringing on board China’s Zhejiang Geely Holding Group Co Ltd as, in effect, joint owners of our national automaker, looks to be the inevitable outcome, which has dragged out for far longer than is wise.
Postponing the inevitable always comes with increasing costs; costs which, in the case of Proton, always ultimately end up with the bill being foot one way or another by the government and Malaysians as the taxpayers.
Given that Proton has been shielded by market protection, courtesy of the government for decades, and has moreover gobbled up billions of ringgit of state-provided grants in one form or another, only to see its national market share progressively shrinking and little headway made in penetrating the highly competitive international auto market — only the most myopic nationalists will argue that more of the same is tenable.
It is, therefore, rather unfortunate (if not unexpected) that Tun Dr Mahathir Mohamad, whose brainchild Proton is, will bitterly lament its bringing in a foreign partner.
One of the distinctive hallmarks of our enviable economic success story as a nation has been a general and thankful absence of overly nationalistic rhetoric clouding our economic policymaking.
Economic pragmatism was what brought our nation thus far, and will remain the cornerstone if we are to continue our winning streak.
Dr Mahathir himself, after all, saw fit to bring in a Japanese partner to give us our first “national” cars virtually overnight.
Malaysians almost universally bought into his optimism for the project, which was infused with the attendant grand ambition to usher in the nation’s plunge into mass industrialisation through the development of indigenous sophisticated technology.
It is optimism which, with the benefit of hindsight, has proven to be rather misplaced. To say nothing of the grand ambition increasingly risking becoming little more than grandiose.
The former prime minister may be forgiven for refusing to give up on his self-admitted “pet child”. But, a grave disservice may be done to the nation if politics is injected into the merits of Proton securing a foreign investor, and populist and nationalist rhetoric added to the mix of critical comments.
Malaysians, who put up with the many and varied shortcomings of Proton vehicles all these years, through tax dollars channelled towards the company for “technology development” and highly protective tariff walls that rendered better-quality imported cars uncompetitive, are long due for a break from such a state of affairs.
Without biting the bullet of bringing in a stronger foreign partner to inject new vigour into Proton, it simply risks becoming an industrial dinosaur being endlessly propped up by regular infusions of publicly-sourced funds. That simply cannot be.
There is then the somewhat ugly and sinister spectre some would wish to stir up of China’s political and economic goals each time one of its economic entities breaks into one economic sector or another abroad.
That is short-sighted, if not downright irresponsible, politically opportunistic and even highly risky in terms of our always excellent bilateral relations with the rising Chinese economic behemoth.
Just as the nation reaped tangible and intangible dividends from the first-mover advantages accruing to us when the late Tun Abdul Razak Hussein pioneered the region’s opening of diplomatic ties with the People’s Republic of China more than four decades ago, placing our early bets on an economically-ascendant China will likely pay us even greater dividends down the road.
Proton is, in any case, not a pioneer in opening a door internationally for Chinese auto companies. Even its new Chinese partner already owns Sweden’s once ailing Volvo, turning the latter around in less than a decade.
Given the circumstances in play, the foreign tie-up Proton has stitched up is easily a winning combination for all parties involved.
By retaining nominal majority ownership, Proton’s Malaysian owners remain in the driver’s seat. Taking on a Chinese partner allows Proton to ride more confidently on the economic success of our own dynamic region, that of the even greater promise that the Chinese market affords and probably makes taking on the traditional auto giants in their own turf not such an unlikely pipe dream.
For the country as a whole, what better advertisement can there be than such a classic tale of turning a potential lemon in Proton into lemonade.
Our formidable and hard-earned international reputation as an economic pragmatist that openly welcomes foreign investments will also be only further enhanced through this high-profile deal.
**The writer views developments in the nation, the region and the wider world from his vantage point in Kuching, Sarawak.