Proton gets state jumpstart but needs more than cash to stay on the road

MALAYSIA's national car project Proton, rolled out under an industrialisation agenda in the 80s by the South-east Asian tiger economy, is bent on a revival plan after securing RM1.5 billion (S$495 million) from the government in April.

Carmaker Proton Holdings, now controlled by Malaysian-listed DRB-Hicom, has no choice as the state's financial lifeline comes replete with conditions - tie up with a strategic player and craft a recovery plan. It has five years to get its act together and turn around, by which time it would need to repay the government loan.

These are not ground-shifting conditions for Proton Holdings which is struggling in an industry where scale and capital are king and plump margins are elusive due to bitter competition. The carmaker has had many false starts over the years in its attempts to join forces with foreign stalwarts, chiefly Volkswagen and General Motors, in the hope that it would provide access to new technology and production platforms to scale up.