Najib bows to Proton pressure?

High-placed sources claim government backtracks on decision to use Honda Accords after Proton forces its way in by promising new executive models, deliverable in the next three months.

KUALA LUMPUR: Proton has emerged as a major winner after forcing the government to make a last minute U-turn to allow the national carmaker to continue supplying official vehicles to the federal government to replace the aging Proton Perdana Executive and Inspira series.

The government had originally agreed in July this year to replace the Perdana Executive and Inspira fleet with the Honda Accord series.

Honda Accord was picked following Proton’s inability to come up with a model to replace the out-of-production Perdana series. Letters to that effect had been sent out to all government agencies and ministers. In fact, Honda has been notified of the immediate purchase of 350 Accords – the 2013 models which were launched early this month.

However on Monday, Sept 9, Proton managed to convince Prime Minister Najib Tun Razak to allow Proton to continue supplying its models to the federal government. The speed in which this decision was made has baffled Putrajaya officials and industry players.

According to government sources, the Proton high-level management team had called for a meeting with the National Economic Advisory Council on Monday to put forward their proposals on their readiness to supply the official fleet. The meeting was chaired by Najib.

According to the people-in-the-know, Proton informed the economic council and Najib that it was ready with a new model which could be used for the official government fleet, and that the delivery could be made as early as next January.

On Tuesday, a team of high ranking government officials made a visit to Proton to inspect the prototype vehicle, coming back highly convinced of the model.

On Wednesday, Najib informed the cabinet that the earlier decision to replace the Perdana Executive and Inspira series with Honda Accord had been cancelled, and that Proton would be delivering its models for the government fleet.

Sources said Najib had said that the decision was made as “it was the government’s duty to protect Proton”. This was reminiscent of former prime minister Dr Mahathir Mohamad’s defence of Proton in the past. Proton is Mahathir’s brainchild and he continues to serve as the carmaker’s advisor.

Industry players claimed that Proton managed to outmuscle the government on this matter by using the influence of Proton’s godfather Mahathir and business tycoon Syed Mokhtar Al- Bukhary, whose company DRB-Hicom took over Proton in 2012. Interestingly DRB-Hicom also has a joint venture manufacturing collaboration with Honda.

FMT also learnt that Mahathir had met Najib personally on this matter.

Questions persist on Proton’s ability

Although Proton has managed to keep its hold to supply the government vehicles, questions still remain on its ability to deliver as promised.

“Proton has failed to introduce a proper replacement model for the Perdana series all these years. And now it has promised the government to deliver a new model by the beginning of next year.

“What is of concern is, how can they come up with a model so quickly when six months ago they were clueless, to the extent of allowing the government to look at Honda?”

“Now, suddenly their R&D work is complete, and they have a prototype. Even then, can they start their manufacturing line quick enough to supply the vehicles to the government over the next four years?,” asked an industry expert.

“What about doing the roadworthiness tests and other inspections on the new model? Do they have the time for this?”

He also asked if Proton had its own engines to fit the models, or if they would be tapping into someone else’s product.

“Would the final product be a unit which, say, belongs to Honda, an engine from someone else, but is passed off as a Proton model?”

“If that’s the case, the only work Proton would be doing is to assemble the units, fit in the engines, do some cosmetic works, and put its badge before delivering them to the government,” he speculated.

Another industry oldtimer said that the whole scheme appeared as though the government was only interested in bailing out Syed Mokhtar and Proton.

“It does not make any sense. Why would Najib agree to this last minute flip-flop? Why not proceed with the Honda Accord models as planned, and when Proton is eventually ready with its own models, the government can then use the Proton models,” he said.

“This is a false sense of nationalism, saying that the government was duty-bound to support Proton,” he said.

He speculated that in the end, even if Proton was unable to deliver the vehicles next January, DRB- Hicom would be in a position to marry the Proton brand name and the available Honda Accord models for delivery.

“At the end of the day, it all looks like Proton wanting to keep its name as the government’s official fleet supplier. Obviously the benefits are huge for them to go to this level to convince the government to continue backing them,” he said.

An official announcement on the decision to use Proton models as official government vehicles is expected to be announced soon.