Report Proton

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PROTON

From SAGA to IRIS

MAF 680

INTEGRATED CASE STUDY

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EXECUTIVE SUMMARY

A multinational motor industry giant (assume MAZDA) had sensed opportunity in Proton and approached a consultant, Chartered Accountant Saiful Alawi, to review Proton and recommend whether an investment or collaboration should be considered. Saiful Alawi needed to consider a number of significant factors in order to arrive at the decisions. Basically, PROTON was incorporated on 7th May 1983 to manufacture, assemble and sell motor vehicles and related products. PROTON produced Malaysia’s first car, the Proton SAGA which was commercially launched on 9th July 1985. Proton’s model products includes Saga, Iswara, Wira, Satria, Perdana, Putra, Gen 2, Savvy, Satria Neo, Persona, Exora and most recently Iriz. Despite all that, Proton has being criticized for poor quality control.

Automotive industry becomes more competitive and always facing challenges. Globalisation and liberalisation allows the industry to penetrate the local and regional markets. Globalisation describes a process by which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation. On the other hand, liberalisation is defined as a process whereby measures are taken to expand market access to foreign services providers or to diminish discrimination against them to the domestic suppliers. I as a Saiful Alawi used Balanced Scorecard approach in order to examine Proton and recommend to MAZDA Company to not invest or collaborate with the Proton because the performance of the Proton is not showing a not excellent. They might not gain any benefit if they collaborate or invest in Proton since Proton are quite protected by the government. I as a Saiful Alawi would recommend to MAZDA Company to do nothing with the Proton.

PROBLEM STATEMENT

Whether Saiful Alawi would recommend MAZDA Company to invest in Proton or collaborate with Proton or do nothing with Proton.

ALTERNATIVE SOLUTION

In order to provide a recommendation to MAZDA Company, I as a Saiful Alawi used Balanced Scorecard approach to review the Proton performance.  

Customer perspective measures a firm performance that indicates how well firms are satisfying customers’ expectations. Nowadays, customers think that overseas cars are better than the national cars. National Proton car is lack of quality as compared to international Proton cars. A simple accident can lead to a car crash. The Proton cars design sometimes is very bad. For example, the design of Tiara cars did not produce many sales since it does not meet customer satisfactions. This shows that customer perspective towards Proton is not good.

Internal business perspectives measures of firm performance that indicate how well firms’ internal processes, decisions and actions taken by them. Proton supplier did not provide a good quality of raw materials in manufacturing Proton’s car. These resulted the PROTON cars in a bad quality and fail to meet customer satisfaction. In 1983, PROTON signed a joint venture with Mitsubishi to produce Proton Saga. In 2004, Proton had technical discussion with Renault SA and GM. PROTON buys 57.57% stakes in MV Agusta S.p.A at €70 million and sold MV Agusta in 2006 to GEVI S.p.A for a token of €1. Khazanah Nasional Bhd exercised its rights by kicking out Tengku Mahaleel as CEO of Proton in July 2005. In 2008, Proton being sued by its former Chinese Joint Venture for ¥1 billion as compensation of failed venture. This shows that PROTON internal business perspectives are bad.