Statement by Lim Guan Eng in Petaling Jaya on Wednesday, 28th May 2008:
Holdings Bhd. should adopt the CAT principles of Competency,
Accountability and Transparency if they are committed to be a viable
player in the automotive industry
grave concern that Proton Holdings has to incur a loss amounting to
RM900,000, for the final quarter of its financial year ended 31 March
(FY 2008). For Proton to claim a RM236.4 Million profit is misleading
when these profits were the result of:
a. A R&D
government grant of Rm194Million Research & Development (R&D) grant
received from the “Industrial Adjustment Fund”.
b. A tax
writeback of RM43.3Million
R&D grant and a tax writeback, Proton would actually incur a loss of
Rm900,000. This is shown by Proton’s operating expenses of Rm1.77Billion
for the final quarter, which exceeded its revenue of Rm1.72Billion.
State Government’s own experiences with Proton’s cars have not been a
happy one when even the State Secretary complained of leaking roofs and
faulty engines after a year’s of usage. Even though the cars are still
covered by warranty, the loss to the government caused by the time
needed to repair them is an unnecessary inconvenience. Were it not for
the Penang state government’s wish to support the national car project,
other car models with greater fuel efficiency, comfort and reliability
would be purchased. However, if Proton cars continue to show its
inferior quality, the Penang State Government may be compelled to review
its car purchase policy.
government’s granting of the Rm194Million R&D grant raises the question
of money well spent when the quality of the cares are so disappointing.
This is proven by the failure of Proton to break into the export market
relying solely on the domestic market and helped by high tariff
protection, government subsidies and grants. If Proton were to depend
solely on performance, it would have either be sold or even closed down.
the Federal Government’s wisdom of granting Rm194Million R&D grant when
the quality of Proton cars have neither improved nor matched its
competitors. Relying on the government’s R&D grant would not help Proton
meet its Key Performance Indicators (KPI) benchmarks. Proton should not
claim any turnaround in its operating results but adopt the CAT
principles of Competency, Accountability and Transparency to be a viable
player in the automotive industry.
Lim Guan Eng, DAP
Secretary-General & MP for Bagan & ADUN for Air Puteh