Malaysia Automaker Back In The Black

After five straight quarters of losses, state-owned Proton posts profits after announcing new car and expansion plans in China and India.

KUALA LUMPUR, Malaysia (AP) — Malaysia's state-owned carmaker Proton said Friday it returned to profit in the three months through September, rebounding from five straight quarters of losses.
It also unveiled plans to expand in China and India to boost long term earnings.
Higher car sales and operational improvement helped Proton achieve a second quarter net profit of 3.5 million ringgit (US$1.0 million; euro680 million). In the same period the previous year, it lost 250.3 million ringgit (US$75 million; euro51 million).
Revenue rose by 3 percent from a year ago to 1.3 billion ringgit (US$390 million; euro265 million) and was up 14 percent compared to the previous quarter.
''Clearly, Proton has a long way to go. Notwithstanding, it should be acknowledged that Proton has progressed. We will put in all the effort to ensure it comes out of this difficult period stronger, leaner and more competitive,'' chairman Mohammed Azlan Hashim told reporters.
He said car sales hit 34,320 units in the most recent quarter, a 22 percent rise from the previous quarter and increasing Proton's market share to 33 percent from 26 percent earlier in the year.
The company will launch a new car in January and hopes to introduce its first multipurpose vehicle by early 2009, he said.
Yet, ''we cannot really say that Proton is totally out of the woods,'' he said.
The report of better earnings comes after the government last week abandoned talks with Volkswagen AG and General Motors Corp. on strategic tie-ups with Proton. Proton had been considering partnerships with the companies to help reverse its fortunes. However, the government said it had recently noted progress, including improvements in domestic sales and exports.
Mohammed Azlan said Proton would seek ''collaborative engagements'' with various partners to boost exports further, focusing on China, India, Southeast Asia and the Middle East.
Chief executive Syed Zainal Abidin Mohamed Tahir said the company would begin shipping 30,000 cars to China this month as part of its collaboration with Jinhua Youngman Automobile Manufacturing Co. Ltd.
Proton recently secured an order for 5,000 cars for Iran's taxi market, launched sales operations in Indonesia and Thailand, and is exploring partnerships in India, he said.
Proton aims to set up a production plant in China by 2011, and one each in India and the Middle East by 2016 under plans to grow exports and cut its dependency on the Malaysian market, Syed Zainal said.
Malaysia accounts for around 90 percent of Proton's sales, but this is expected to shrink to about 50 percent by 2011 and to 30 percent by 2016 as exports grow, he said. He didn't give further details.
In the domestic market, Syed Zainal said the launch of a new sedan in January will help Proton snatch back the No.1 position from local rival Perodua.
''I am confident. I think we should be able to regain the No.1 position,'' he said.
Asked if the company will be able to turn a profit for its fiscal year ending March 2008, he said the ''signs are encouraging.''
Proton thrived for many years in a protected environment, with high duties on imported vehicles forcing many Malaysians to buy its cars. Duties have slowly been lowered in line with a regional trade agreement, and more Malaysians are buying imported vehicles.