A Hong Kong based Chinese mouthpiece, the South China Morning Post (SCMP) is playing a game of words, asking why Malaysia would marry its proverbial child – that is Proton – to a Chinese?
The newspaper said China’s Geely Automobile Holdings has emerged as the clear leader ahead of France’s Renault and Peugeot parent PSA in the bidding contest for 51% controlling stake of Proton’s shares which is to be divested by the company’s owner DRB Hicom.
Geely shares rose to an all-time high on the news that it is leading the contest, despite denials by the China based company.
If Geely wins the deal, it will get access to Proton’s assembly line in Malaysia, allowing it to ship vehicles tax-free anywhere in the Asean block.
Tongue in the cheek, the paper asked “just why is the Malaysian government marrying its favourite child off to a foreigner?”
Saying it is a particularly pertinent question given that, with an election widely predicted to be held this year, it said history holds the answer.
It also said since Malaysia is a quarter Chinese (the Chinese community forms 25% of the local population), but the China car maker has the money to buy the 51% shares and pump the soft loan of US$284 million in the Malaysian company.
It also said Prime Minister Najib Razak is already under fire regarding Chinese influence on the economy following his trip to Beijing in November that secured funding for infrastructure projects worth 143 billion ringgit.
It also said Malaysia would benefit from Geely’s extensive network and a Chinese conglomerate that owns Volvo and the London Taxi Company.
“Geely’s superior technology is another factor, but that’s under the bonnet,” it teased.
So what will the successful suitor get for the rumoured 51 per cent investment it asked.
Geely will get a domestic market share, in which indigenous carmakers are protected by high tariffs on foreign imports through the National Automotive Policy.
It will get access via Proton’s Tanjung Malim plant to manufacturing for Southeast Asian markets.
It will get a brand with global rallycross credentials and access to Lotus technology: something a Chinese-badged car has yet to achieve.
“Brand Malaysia, which has suffered of late, is keeping its people’s car marque, and the jobs of 12,000 employees, alive, while owners DRB-HICOM divest up to 51 per cent of their loss-making holding,” the paper said.