Monday, May 23

Merger of Proton and Perodua will benefit automotive industry, says Mustapa

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MERGING the two national automotive companies, Proton Holdings Bhd and Perusahaan Automobil Kedua Sdn Bhd (Perodua) will help to counter the structural problem in the local automotive industry, the Dewan Rakyat was informed yesterday.

Quoting the results of a study conducted by the Malaysian Automotive Institute, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said that if the structural problem is resolved, the local automotive industry will become more competitive and capable of penetrating overseas markets.

With the merger, structural problems like the rise in fixed costs can be reduced and the use of production capacity optimised.

“The high cost of components can be also be reduced through the development of mass scale vendor and procurement programmes,” he said in reply to a question from Kairy Jamaluddin (BN-Rembau) who wanted to know the results of a study on the merger of Proton and Perodua.

The merger proposal had been presented at the Economic Council Meeting chaired by Prime Minister Datuk Seri Najib Tun Razak in January.

At the meeting, it was agreed that the merger of Proton and Perodua is done in a progressive manner.

“As at this initial stage, both the companies have identified the areas where strategic partnerships could be explored to enhance their capacity use and competitiveness,” he said. — Bernama