Proton (company)
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Proton, short for Perusahaan Otomobil Nasional (Malay for National Automobile Enterprise), is Malaysia's first car manufacturer initiated in 1983 by then-Malaysia's Prime Minister Mahathir Mohamad. Proton is listed on the Bursa Malaysia.

History

Based on technology and parts from Mitsubishi, production of the first model, the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained. The 100,000th Proton Saga was produced in January 1989. [1]

Until the end of the 1990s, the car's logo featured the crest from Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new Proton logo features a stylized tiger head.

In 1993, a model called Proton Wira was introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold between 1996 and 1998 [2]. Proton Perdana based on the Mitsubishi Eterna, was first produced in 1994, intended for higher end market.

By 2002 Proton held a market share of over 60 per cent in Malaysia, which was reduced to barely 30 percent by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import tariffs to a maximum of 5%.

Proton Waja (Proton Impian in UK) is the first car model designed internally by Proton. It was launched on February 8, 2004.

With the acquisition of Lotus technologies in 1996 from Bugatti, Proton has gained an additional source of engineering and automotive expertise. This lead to the production of Proton Gen-2 which was code name Wira Replacement Model (WRM) before the launch. The Gen-2 is the first of cars to be manufactured and assembled at the new manufacturing plant in Tanjung Malim, Perak which is part of Proton City development project. The plant was opened in 2004. On June 8, 2005 Proton introduced the second model to be manufactured in Tanjung Malim, the 1,200 cc 5-door supermini, the Proton Savvy. Both the Gen-2 and Savvy, were models that MG Rover was looking to rebadge when the British firm entered into collaboration talks with Proton. However these joint-venture talks were unsuccessful and MG Rover subsequently collapsed.

In December 2004, Proton purchased a majority share in MV Agusta of Italy. MV Agusta is the manufacturer of MV Agusta, Husqvarna, and Cagiva motorcycles. A year later, Proton sold off its 57.7% share in MV Agusta to another Italian company for a token of one Euro. Due to heavy debt by MV Agusta, the selling enabled Proton to write off the losses off its book.

In October 2004, Proton announced that an understanding has been reached with Volkswagen AG of Germany to establish a strategic partnership. Under the tie-up, the two carmakers are expected to exploit each other's strengths. Proton would gain access to Volkswagen's superior technical capabilities and technology. In return, Volkswagen may utilise Proton's spare capacity at the latter's Tanjung Malim to assemble cars for export to the South-East Asian market, where the German auto giant has a weak presence. Furthermore, the tie-up may see Volkswagen assist in distributing Proton vehicles in China while Proton does the same for Volkswagen in South-East Asia. Nonetheless, none of the parties announced detailed and concrete plans for the partnership. On January 13, 2006, Volkswagen announced that negotiation of the partnership has failed because VW's plans were different and clashes with the terms and condition that Proton offered. [3].
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Exports

Proton exports cars to the United Kingdom and Australia and the company is aggressively marketing its cars in several other countries including the Middle East.

Proton began its exports with countries where (as in Malaysia) drivers use the left side of the road like New Zealand in the late 1980s, but its success was mostly limited to the United Kingdom where it entered the market in 1989. There advertised with the slogan Japanese Technology, Malaysian Style, Proton cars proved popular among budget-oriented motorists, and like Japanese and South Korean models before them, led to the demise of Eastern-bloc manufacturers such as Lada and Zastava. By the 1990s, Proton had withdrawn from the New Zealand market after offering only the Saga four-door and Persona five-door models. The Persona and Natura models were sold in Chile briefly during the late nineties by a local Nissan importer, but few were sold and the venture ended after two or three years.

Proton also exports cars to countries in Southeast Asia and Australia, and now produces models in left-hand drive (to drive on the right side of the road), for export to continental Europe. An entry into the US market was considered by Malcolm Bricklin following Hyundai's successful launch in the mid 1980s. However, exports to the US never materialised, as the cars required hundreds of changes to meet American safety standards.

It is a company that can be used as a case study for rent seeking as tariffs on imported cars rose almost immediately following the formation of Proton. Also AFTA agreements on relaxing entries into the ASEAN marketspace had exemptions specifically for Proton. The Malaysian government gained a three-year exemption for Proton from 2002 to 2005 where entry tariffs had to be lowered to 5%.

In the United Kingdom, Proton cars suffer somewhat from a poor public image. Deeply unfashionable with younger drivers, they are identified as being a vehicle popular with elderly people. However, the make does command loyalty and appreciation from those who do drive it, thanks to its relatively economic fuel consumption and reliability.