Proton-Perodua merger not benefiting both parties – research

According to a research conducted by MIDF (Malaysian Industrial Development Finance Bhd), the possibility of a merger between the 2 top national carmakers Proton (Perusahaan Otomobil Nasional) and Perodua (Perusahaan Otomobil Kedua Sdn Bhd) as proposed might be harder than most expected.

The proposed merger came from the prime minister Datuk Seri Najib Tun Razak late last year and since then it has been quite a widely anticipated move for the 2 companies. MIDF said that the merger is a ‘distant possibility’ especially with the less than interested sentiments coming from the stakeholders of Perodua.

Datuk Seri Mustapa Mohamed, the Minister of International Trade and Industry last week said that despite acknowledging the positives of a merger, the government will not however force the 2 companies to go into a partnership without having a mutual agreement met.

Having said that, MIDF also added that a merger would allow Proton to solve issues like its excess capacity problem as well as to share resources like research and development capabilities. On top of that, it would also help the company streamline its purchases with vendors while enjoy a bigger network of dealerships with Perodua and its partners namely UMW Motors and Daihatsu Motors. On this note, Perodua would come across as less keen on a merger as they are very focused on compact cars and hence Proton’s platform which produces primarily sedan and MPVs might not be that beneficial to the second car maker.

On top of that, Perodua’s partners, Daihatsu and UMW too are reportedly less than interested as they could lose their top spot in terms of vehicle sales back to Proton which Perodua has been commanding for the past 5 years.