Consolidation might be the best option to drive local automotive industry forward

He said that the call has been made by the government and that all parties in the industry should come together and start working out the plans and how the entire eco-system could be channeled for the liberisation so that they can be more competitive against the big boys. Syed Zainal said that the time is right and that it is only natural that the industry moves forward towards this direction. He however pointed out that the major obstacle is the differences in opinions among the companies and if all parties can agreed that what needs to be done is for the good of the industry, then it would be good for everyone. For the industry to remain viable in the long run, consolidation would be important because the industry needs to be continuously effective.

Datuk Seri Najib Tun Razak, the prime minister had in his speech during the company’s 25th Anniversary celebration called on the local car makers to consider mergers so that the automotive industry would remain competitive and that structural changes in the industry are needed to increase its capacity. He said that if over-capacity is going to become an obstacle for the industry to grow, then mergers would become the ideal solution for these companies to become ‘stronger, bigger and more able companies’.

He also said that while innovation is important, volume would be vital for the company to remain competitive both on the local and global automotive scene, hence he called on Proton to use Lotus which is an international brand to help them reach better economies of scale and to leverage on this strength. He said that both Proton and Lotus must combine its forces and go forward. Syed Zainal concurred with the Prime Minister on the point that Proton must, in the long run achieve greater economies of scale and using Lotus to springboard this initiative might be the best option.