Perodua and Proton Will Not Be Forced to Merge
“We cannot force them to make a decision as there is a long spectrum. At one end is loose cooperation and at the other, a merger, which has yet to be decided,” Mustapa told reporters at a signing ceremony between SME Corp Malaysia and SME Bank yesterday, adding that the government would encourage and have negotiate with both firms.
“It's a major collaboration and cooperation between Proton and Perodua and not a straight forward process,” he explained. The minister also said there have been numerous mergers in Malaysia and it made sense for the two companies to collaborate and make the national automotive industry more competitive.
Produa believes that a consolidated national carmaker would create global scale, lower costs and make their products more competitive. On the other hand, Perodua was less certain about the merger that could disrupt or delay its five-year plan, which had been developed with its partner Daihatsu.
The main beneficiary of the deal would most likely be Proton, given that the financial power and performance favors Perodua, which has higher sales numbers higher capacity utilization. Perodua had a 34.7% share of the domestic market in 2010, while Proton was second with 28.9% of market.