2009 Annual Report - ChartNexus

Innovation in Motion 

PROTON ANNUAL REPORT 2009 

Success. Challenges. Responsibility. 

PROTON Holdings Berhad (Company No.623177-A)

UNITED 

KINGDOM 

EGYPT 

SOUTH 

AFRICA 

Cyprus 

Cairo 

TURKEY 

Lebanon 

SYRIA 

Kingdom of Bahrain 

Qatar 

United Arab Emirates 

SAUDI 

ARABIA 

Yemen 

IRAQ 

Oman 

MAURITIUS 

IRAN 


CHINA 

BANGLADESH 

THAILAND 

MALAYSIA 

TAIWAN 

SINGAPORE 

BRUNEI 

INDONESIA 

AUSTRALIA 

The essence of PROTON lies in its cars. With the Group striving to reach new heights with the right car, for 

the right market, at the right price and at the right time, PROTON is truly Malaysian ‘Innovation in Motion’ 

with global presence. By constantly innovating itself, PROTON continues to build a presence in domestic 

and international markets. 

EVORA – the first new model to be introduced by LOTUS in 13 years, was unveiled at the British 

Motorshow in July 2008 to rave reviews from the foreign media. 

EXORA – the country’s first homegrown MPV, was officiated by Prime Minister YAB Dato’ Sri Mohd Najib 

Bin Tun Abdul Razak in the presence of ‘Bapa PROTON’ Tun Dr Mahathir Mohamad.

A Life Companion 

PROTON is synonymous with building cars and mobilising Malaysians. It has brought the country forward by 

leaps and bounds in the automobile industry. From our first ever production, the Saga, to the latest launch of 

the Exora - Malaysia’s first home-grown MPV, the brand has indeed been faithfully planning, designing, and 

manufacturing cars with Malaysians’ needs and wants in mind. 

At PROTON, it is our vision to become Asia’s premier automotive brand; a brand that connects with people 

and provides products which become life companions. 

PROTON has a unique ability to understand people’s needs and provide the right product with efficient service 

and genuine quality. We build cars with care for passenger safety and genuine quality in order to provide high 

durability and lifelong companionship. Our wide portfolio ensures that we meet smart personality needs in 

terms of design, power and size for different age groups so PROTON can be the right companion for life. 

It is an integral part of our business and our brand, without which, we would not have either share of market 

or share of heart. 

1985 marked a momentous year in Malaysia’s history – it was the year in which the country’s first national car 

was born. 

Today, PROTON has emerged as the only full-fledged car manufacturer in the country. PROTON’s current lineup 

includes the Saga, Iswara, Wira, Satria, Perdana, Putra, Satria GTi, Juara, Waja, Arena (Jumbuck), Gen.2, 

Savvy, Satria Neo, Persona and our very latest, the Exora. 

PROTON not only commands a substantial share of the domestic market for passenger cars, but over the years 

we have also been building distribution networks in key market centres across the four regions of South East 

Asia, the Middle East, United Kingdom/Western Europe and Australia, where PROTON has become a hit with 

many car buyers. 

The imperative factor for success lies in the people and the products. PROTON employs a brand philosophy 

that spells out Companionship. 

PROTON’s core values of Companionship are in the areas of placing customers first, even before profits. 

Customer satisfaction and lifelong relationships stay at the heart of our organisation. At PROTON, we nurture 

the power of humanity. Our attitude remains humble, approachable and thoughtful. Togetherness and 

Teamwork make us stronger, better and more proactive. We work towards creating a unique bond between 

our staff, customers and our product promise – “Life Companion”. 

PROTON constantly strives for manufacturing excellence and continuous quality improvements, while 

introducing cost reduction initiatives and vendor rationalisation plans to become a more dynamic and 

competitive car manufacturer. 

Today, we are able to differentiate ourselves from the others, stand out from the competition, influence 

customers’ purchase decision, build customer loyalty and as a result boost the company’s financial performance, 

image and brand. 

PROTON 2009 ANNUAL REPORT 

1

Corporate Mantra & Core Values 

The PROTON Way 

PROTON employees are dedicated to the Group’s long-term success. 

Every PROTON employee shall operate under the Group’s shared 

values and rely on these values to guide their behaviour with each 

other and the customers. These values form the foundation of how 

we work and conduct business. 

2

Core Ideology 

Audacious Goal 

Driving Malaysia’s transformation into a leader in 

technology and quality. 

Vivid Description 

We deliver innovative and superior quality products 

and services. Our brands inspire confidence and pride. 

Core Values 

Quality 

We make products that work the first time, every 

time. 

Customer Focus 

Customers are the source of our income. We deliver 

on our promises to our customers’ satisfaction. 

Innovation 

We challenge convention, always seeking new and 

better ways of doing things. We view change as 

opportunity. 

Purpose 

Teamwork 

Speed 

Corporate Mantra & Core Values 

We are a passionate group of people working 

together, creating exhilarating products and services 

for global markets, synonymous with great styling, 

innovation and leading technology. 

We trust, respect and share knowledge to foster 

teamwork at the workplace. 

We have a “can-do” attitude and will not rest until 

the problem is solved. We have an inherent sense 

of urgency in everything we do. 

Caring 

As a responsible corporate citizen, we invest in safety, 

health and the environment. 


3

PROTON’s Policies 

Environmental, 

Health and Safety Policy 

The Company’s mission is to strive towards excellence 

in all aspects of PROTON’s operations. In achieving 

our goal, it is necessary to promote and protect the 

health and safety of PROTON employees and ensure 

that the environment is unharmed. 

The Group is committed to providing a conducive, 

safe and healthy working environment for our 

employees and to ensure this, it is our policy to:- 

• Take responsibility for the safety and health of 

our employees; 

• Provide the appropriate resources; 

• Take all action necessary to remedy any noncompliance; 

• Monitor and maintain high standards in 

environmental protection as well as health and 

safety measures. 

In implementing the Company’s policy, we shall, 

where reasonably practicable:- 

• Comply with all rules and regulations concerning 

the environment, health and safety; 

• Provide all the necessary facilities and equipment 

for the employees; 

• Actively promote programmes for the employees 

to instill awareness for the safety and health of the 

employees, our business associates and the 

public; 

4 

• Provide adequate information and assistance 

to our employees and our neighbours to avoid 

unacceptable effects on the environment. 

To assist the Company in achieving our goals, we 

shall work together and towards this end, employees 

shall:- 

• Abide by all rules and regulations concerning the 

workplace; 

• Utilise all the facilities provided by the 

management in a safe and proper manner; 

• Maintain good work practices; 

• Actively participate in all the Environmental, 

Health and Safety (EHS) programmes. 

This is our objective and it is our intention to put 

this EHS Policy into action and to make it our way 

of life. 

Environment, health and safety are our priority.

Quality Policy 

PROTON’s Policies 

To achieve the above commitment, PROTON will:- 

• Ensure quality as the Number One work ethics in all operations; 

• Establish an effective and efficient Quality System based on the requirements of ISO 

9001:2008 standards; 

• Provide adequate skills and knowledge to all levels of personnel through systematic and 

structured training programmes; 

• Provide a culture and environment of continuous learning, improvement and innovation 

towards total quality excellence; 

• Provide a conducive, safe and healthy working environment in which people like to 

work and prosper. 


5

PROTON 2009 Annual Report 

Contents 

6 

02 Corporate Mantra & Core Values 

04 PROTON’s Policies 

10 Financial Calendar 

11 Key Financial Indicators 

12 Summary of Financial Highlights for Five Years 

16 Corporate Profile 

20 Awards and Recognition 

22 Corporate Information 

24 Group Operations 

26 Board of Directors 

28 Profile of Directors 

36 PROTON Group Management Committee Members 

38 Other Senior Officers 

42 Chairman’s Statement 

58 Managing Director’s Review

68 Operations Review 

138 Statement on Corporate Governance 

156 Additional Compliance Information 

160 Statement on Internal Control 

166 Risk Management 

172 Calendar of Events 2008 - 2009 

180 Statutory Financial Statements 

283 Shareholding Statistics 

286 Properties Owned by PROTON Group 

292 Share Price and Volume Traded 

293 Notice of Annual General Meeting 

295 Statement Accompanying the Notice 

of Annual General Meeting 

Form of Proxy 


7

Passion to Innovate

Passion to 

Innovate 

By pushing the envelope 

of innovation, PROTON 

strives to build vehicles 

that go beyond the 

expected. 

Innovation in Motion

Financial Calendar 

27 Aug 2008 

28 Aug 2008 

27 Nov 2008 

15 Dec 2008 

10 

Announcement of Unaudited First 

(1st ) Quarter results for the period 

ended 30 June 2008 

Fifth (5 th ) 

Annual General Meeting 

Announcement of Unaudited 

Second (2nd ) Quarter results for 

the period ended 30 September 

2008 and declaration of an interim 

dividend of 5 sen per share (less 

25% tax) for the financial year 

ended 31 March 2009 

Date of Entitlement to the interim 

dividend of 5 sen per share (less 

25% tax) for the financial year 


14 Jan 2009 

27 Feb 2009 

29 May 2009 

30 Jul 2009 

30 Jul 2009 

21 August 2009 

Sixth (6 th ) Annual General Meeting 

Date of Payment of the interim 

dividend of 5 sen (less 25% 

income tax) for the financial 

year ended 31 March 2009 


Third (3rd ) Quarter results for the 

period ended 31 December 2008 


Fourth (4th ) Quarter results for the 

period ended 31 March 2009 

Announcement of Audited 

accounts for the financial year 


Notice of Sixth (6 th ) 

Annual General Meeting

Key Financial Indicators 

Basic Earnings Per Share (Sen) Net Assets Per Share (RM) 

80.6 

8.5 

(107.3) 

33.6 

(54.9) 

2005 2006 2007 2008 2009 

10.7 10.7 

2005 

9.9 

2006 2007 2008 2009 

Dividend Paid (RM Million) Retained Earnings 

Carried Forward (RM Million) 

137.3 

2005 

54.9 

27.5 

20.6 

2006 2007 2008 2009 

4,916.9 4,908.7 

2005 

9.5 

4,291.7 

4,476.2 

9.3 

4,153.9 

2006 2007 2008 2009 


11

Summary of Financial Highlights 

for Five Years 

12 

Balance Sheets as at 31 March 

RM’ Million 2009 2008 2007 2006 2005 

NON-CURRENT ASSETS 

Property, plant 

and equipment 

Prepaid land lease 

2,827.1 3,150.4 3,169.5 3,302.9 3,288.9 

payments - 24.1 9.9 10.0 10.1 

Goodwill 29.0 29.0 29.0 29.0 29.0 

Intangible assets 431.7 275.2 169.1 18.0 14.3 

Associated companies 158.4 165.4 169.8 160.4 165.6 

Jointly controlled entities 195.6 192.7 223.6 245.3 251.8 

Investments 10.4 10.4 10.4 10.4 6.3 

Deferred tax assets 5.7 - - 105.8 38.4 

TOTAL NON-CURRENT ASSETS 3,657.9 3,847.2 3,781.3 3,881.8 3,804.4 

CURRENT ASSETS 

Inventories 1,395.1 1,100.3 1,273.6 1,389.0 967.1 

Receivables 1,080.3 1,099.0 1,192.0 1,244.0 1,403.2 

Current investments 

Deposits, bank and 

15.3 20.8 73.4 212.0 201.5 

cash balances 913.9 1,226.0 626.5 1,586.0 2,454.7 

TOTAL CURRENT ASSETS 3,404.6 3,446.1 3,165.5 4,431.0 5,026.5 

Non-current assets held for sale 36.4 - - - - 

TOTAL ASSETS 7,098.9 7,293.3 6,946.8 8,312.8 8,830.9

Balance Sheets as at 31 March 


EQUITY 

Share capital 549.2 549.2 549.2 549.2 549.2 

Other reserves 398.5 395.8 389.7 412.7 393.8 

Retained earnings 4,153.9 4,476.2 4,291.7 4,908.7 4,916.9 

Equity attributable to 

equity holders of the 

company 5,101.6 5,421.2 5,230.6 5,870.6 5,859.9 

Minority interest - - - - 0.3 

TOTAL EQUITY 5,101.6 5,421.2 5,230.6 5,870.6 5,860.2 

NON-CURRENT LIABILITIES 

Long term liabilities 101.5 230.5 181.6 100.3 759.6 

Deferred tax liabilities 12.2 2.4 0.8 0.8 1.1 

TOTAL NON-CURRENT LIABILITIES 113.7 232.9 182.4 101.1 760.7 

CURRENT LIABILITIES 

Payables 1,571.3 1,524.0 1,367.2 1,519.4 1,979.5 

Taxation 6.3 1.6 2.2 16.9 2.6 

Short term borrowings 306.0 113.6 164.4 804.8 227.9 

TOTAL CURRENT LIABILITIES 1,883.6 1,639.2 1,533.8 2,341.1 2,210.0 

TOTAL LIABILITIES 1,997.3 1,872.1 1,716.2 2,442.2 2,970.7 

TOTAL EQUITY AND LIABILITIES 7,098.9 7,293.3 6,946.8 8,312.8 8,830.9 


13

Summary of Financial Highlights for Five Years 

14 

Income Statements as at 31 March 2009 


Revenue 6,486.6 5,621.6 4,687.3 7,796.9 8,483.3 

(Loss)/Profit 

before taxation (319.2) 144.3 (618.1) 18.0 399.3 

(Loss)/Profit after taxation 

Retained earnings attributable 

(301.8) 184.6 (589.5) 46.7 442.4 

to shareholders 4,174.5 4,476.2 4,319.2 4,963.6 5,054.2 

Dividend (20.6) - (27.5) (54.9) (137.3) 

Retained earnings carried forward 4,153.9 4,476.2 4,291.7 4,908.7 4,916.9 

SHARE INFORMATION 

Per Share 

Basic (loss)/earnings (sen) (54.9) 33.6 (107.3) 8.5 80.6 

Dividend paid (sen) 5.0 - 5.0 10.0 25.0 

Net assets (RM) 9.3 9.9 9.5 10.7 10.7 

Issued share capital (‘000) 549,213 549,213 549,213 549,213 549,213


15

Corporate Profile 

16 

PROTON was incorporated on 7 May 1983 with three primary 

national policy objectives: 

• To spearhead the automotive industrialisation 

process and manufacturing industries; 

• To acquire/upgrade technology and industrial 

skills within the automotive manufacturing 

industry; and 

• To strengthen the international competitiveness 

of Malaysia’s industrial capability. 

PROTON commands a substantial share of the domestic market for passenger cars and over 

the years has made its presence in the following regions: 

• ASEAN 

• China 

• Indian Subcontinent 

• Middle East - North Africa 

• United Kingdom/Western Europe 

• Australia 

• South Africa


17


The much-awaited Exora in production. 

18 

The main business activities of the Group encompass vehicle engineering, research and 

development, manufacturing, distribution, sales and after-sales services. The Group is also 

involved in financial services and property management in supporting the main business 

activities. 

The Group designs and produces cars for diverse consumer preferences. The current portfolio 

of PROTON models includes the reliable family-sedan Waja, the stylish Gen.2, the elegant 

Perdana V6, the versatile Arena (Jumbuck), the proven Saga range, the fun-to-drive Savvy, 

the desirable sporty Satria Neo, the ‘2008 Best Model of the Year’ winner, the Persona, and 

Malaysia’s first home-grown MPV, the Exora. The Group also has in its portfolio, the worldrenowned 

Lotus sports cars, with models such as Elise, Esprit, Exige, Europa and the latest 

being the Evora to suit a range of customer demands and preferences.

The Lotus Exige. 


The Group conducts research in its centres in Malaysia and the United Kingdom on 

new technologies to create cars that are unique in both design and driving performance. 

Through Lotus, the Group provides comprehensive and versatile consultancy services to 

many of the world’s OEMs and Tier 1 suppliers. 

Currently, the Group has approximately 11,500 employees who are involved in the whole 

value chain of the business, from research, design, development, testing, stamping, casting, 

machining and assembly to marketing, distribution, after-sales services as well as corporate 

services. 

Strong customer orientation and competitively priced products are the foundation 

of our business and essential to our success. We aim to maintain market leadership by 

continuing to develop innovative products and satisfy our customers’ needs better and 

enhance profitability. 


19

Awards and Recognition 

PROTON received the following awards from various 

organisations as testimony of the Group’s efforts in leading 

the Malaysian automotive industry and making in-roads in 

branding and motorsports. 

Awards 2009 

• Frost & Sullivan Asia Pacific Automotive Awards 

- Best Model of the Year (Malaysia) 2009 for Proton 

Saga. 

• Reader’s Digest Trusted Brand 2009 Gold Award 

for Car Category. 

• Asian Auto - VCA Auto Industry Awards 2009 

- Best Local Assembly MPV for Exora. 

• Asian Auto - VCA Auto Industry Awards 2009 

- Best Local Assembly Sports Car for Satria Neo 

CPS. 

Awards 2008 

• Reader’s Digest Trusted Brand 2008 Gold Award for 

Car Category. 

• Asian Auto - VCA Auto Industry Awards 2008 

- Best People’s Car Award for PROTON Saga. 

20 

• Asian Auto - VCA Auto Industry Awards 2008 

- Best Comeback Brand Award for PROTON. 

• China Press’ 2008 Chinese New Year Greeting 

Advertisement Award, Full Colour Category. 

• Frost & Sullivan’s 2008 Asean Automotive Awards 

- 2008 Best Model of the Year Award for the 

Persona. 

• Frost & Sullivan Malaysian Manufacturing 

Excellence Awards 2008 - Silver Certificate of Merit 

for Shah Alam Plant. 

• Frost & Sullivan Asia Pacific Automotive Awards 

- Best Model Of The Year (Malaysia) 2008 for 

Proton Persona. 

• Frost & Sullivan Malaysian Manufacturing 

Excellence Awards 2008 - Gold Certificate of Merit 

for Tanjung Malim Plant.

Awards 2007 

• Reader’s Digest Trusted Brand 2007 Gold Award 


• The Malay Mail declared the PROTON Satria Neo, 

winner of the Coolest Car of 2006. 

Awards 2006 

• Reader’s Digest Trusted Brand 2006 Gold Award 


• Nanyang Siang Pau’s 2006 Chinese New Year 

Greeting Advertisement Award - Full Colour 

Category - 5th Runner Up. 

Awards 2005 

• Reader’s Digest Super Brand 2005 Gold Award 


• Merdeka Millennium Endurance Race 2005 

- 1st place-Overall and Class ‘O’ Winner. 

• Malaysian Rally Championship 2005 - Overall Class 

Winner P10 Category. 

Awards 2004 

• Malaysia’s Best Brand Award. 

• National Creativity & Innovation Award 2004. 

• PROTON Waja - 4.5 star out of 5 star rating for 

being the Most Economical and Greenest Sedan 

in Australia. 

Awards 2003 

• Industry Excellence Award 2003, Quality 

Management Category III. 

• Industry Excellence Award 2003. 

• Best Landscape Competition (First Place - Factory 

Category). 

Awards 2002 

• Best Landscape Competition (Second Place - 

Factory Category). 

• Appreciation Award for Contribution to the 

Development of Malaysian Motorsports for 2002. 

• KPMG/The Edge Shareholder Value Award 2002 

Sectoral Winner - Industrial Market. The award 

measured economic profit as a percentage of 

invested capital. 

• Highest Increase in Turnover Award among 

companies listed on the then Kuala Lumpur Stock 

Exchange (now Bursa Malaysia Securities Berhad) 

for financial year 2002-2003. 

• Motor Vehicles and Transport Equipment Sector 

Leader Award among the top 1,000 Malaysian 

companies. 

• Highest Increase in Net Profit Award among 

companies listed on the then Kuala Lumpur 

Stock Exchange for financial year 2002-2003. 


21

Corporate Information 

Board of Directors Date of Appointment 

Dato’ Mohd Nadzmi Bin Mohd Salleh 

Chairman/Non-Independent Non-Executive Director 

Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir 

Managing Director 

Tuan Haji Abdul Jabbar Bin Abdul Majid 

Independent Non-Executive Director 

Tuan Haji Abdul Kadir Bin Md Kassim 


Dato’ Michael Lim Heen Peok 


Datuk Zalekha Binti Hassan 

Non-Independent Non-Executive Director 

Encik Oh Kim Sun 


Dato’ Mohammed Azlan Bin Hashim 


22 

1 January 2009 

1 January 2006 

12 April 2004 

10 March 2005 

15 September 2006 

11 February 2008 

13 May 2009 

17 December 2004 

(Resigned w.e.f. 1 January 2009)

Board Executive Committee (“Exco”) 

• Dato’ Mohd Nadzmi Bin Mohd Salleh – Chairman 

(Appointed w.e.f. 1 January 2009) 

• Dato’ Syed Zainal Abidin B Syed Mohamed Tahir 

• Dato’ Michael Lim Heen Peok 

• Ms Vimala Menon 

• Dato’ Mohammed Azlan Bin Hashim 

(Resigned w.e.f 1 January 2009) 

Board Audit Committee 

• Encik Oh Kim Sun – Chairman 

(Appointed w.e.f. 1 June 2009) 

• Tuan Haji Abdul Jabbar Bin Abdul Majid 

(Re-designated from Chairman to Member 

on 1 June 2009) 

• Tuan Haji Abdul Kadir Bin Md Kassim 


Board Risk Management Committee 

• Tuan Haji Abdul Kadir Bin Md Kassim – Chairman 

• Datuk Tan Kim Leong 

• Dato’ Zainuddin Bin Che Din 

(Appointed w.e.f. 1 October 2008) 

Board Nomination & 

Remuneration Committee 



• Encik Ahmad Tajuddin Bin Abdul Carrim 

• Encik Md Ali Bin Md Dewal 



(Resigned w.e.f. 1 January 2009) 

Board Disciplinary Committee 



• Tuan Haji Abdul Kadir Bin Md Kassim 

• Tuan Haji Abdul Jabbar Bin Abdul Majid 

• Tuan Haji Yusof Bin Ahmad 


(Resigned w.e.f. 1 January 2009) 

Auditors 

PricewaterhouseCoopers 

(Chartered Accountants) 

Level 10, 1 Sentral, Jalan Travers 

Kuala Lumpur Sentral, PO Box 10192 

50706 Kuala Lumpur, Malaysia 

Tel : 03 - 2173 1188 

Fax : 03 - 2173 1288 

Registered Office 

PROTON Centre of Excellence 

KM 33.8, Westbound Shah Alam Expressway 

47600 Subang Jaya, Selangor Darul Ehsan 

Tel : 03 - 8026 9741 

Fax : 03 - 8026 9744 

Registrar 

Tenaga Koperat Sdn Bhd 

Level 17, The Gardens, North Tower, Midvalley City 

Lingkaran Syed Putra, 59200 Kuala Lumpur 

Tel : 03 - 2264 3883 

Fax : 03 - 2282 1886 

Stock Exchange Listing 

Main Board of Bursa Malaysia Securities Berhad 

Company Secretary 

Encik Mohd Nizamuddin Bin Mokhtar (LS 006128) 

Investor Relations 

Encik Kelvin Low 


23

Group Operations 

24 

Engineering Services 

PROTON Holdings Berhad 

Lotus Advance Technologies Sdn Bhd (100%) 

Proton Engineering Research Technology 

Sdn Bhd (100%) 

Lotus Group International Limited (100%) 

Group Lotus Plc (100%) 

Lotus Cars Ltd (100%) 

Lotus Engineering Ltd (100%) 

Lotus Engineering Co Ltd (Shanghai) (100%) 

Lotus Engineering (M) Sdn Bhd (100%) 

Lotus Body Engineering Ltd (100%) 

Lotus Lightweight Structures Holdings Limited 

(formerly known as Holden Lightweight 

Structures Limited) (100%) 

Lotus Lightweight Structures Limited (formerly 

known as Holden Aluminium Worcester Limited) 

(100%) 

Lotus Motorsport Ltd (100%) 

Lotus Holdings Inc (USA) (100%) 

Lotus Engineering Inc (100%) 

Lotus Cars USA Inc (100%) 

Manufacturing 

Proton Tanjung Malim Sdn Bhd (100%) 

Perusahaan Otomobil Nasional Sdn Bhd (100%) 

Proton Automobiles China Ltd (BVI) (100%) 

Goldstar Proton Automobiles Co Ltd (49%)* 

PT Proton Cikarang Motors (Indonesia) (100%) 

Miyazu (Malaysia) Sdn Bhd (51%) 

*Note: Refer to Note 43(c) to the Financial Statements

Sales & Distribution 

Proton Marketing Sdn Bhd (100%) 

Proton Edar Sdn Bhd (100%) 

Proton Cars (UK) Ltd (100%) 

Proton Cars Australia Pty Limited (100%) 

Proton Motors (Thailand) Limited (100%) 

Proton Singapore Pte Ltd (100%) 

Proton Parts Centre Sdn Bhd (55%) 

PT Proton Edar Indonesia (95%) 

Property 

Proton Hartanah Sdn Bhd (100%) 

Proton Properties Sdn Bhd (100%) 

Proton City Development Corporation 

Sdn Bhd (40%) 

Financial Services 

Proton Commerce Sdn Bhd (50%) 

Lotus Finance Ltd (49.9%) 

Proton Finance Ltd (49.99%) 

Investee & Associate Companies 

Exedy (Malaysia) Sdn Bhd (45%) 

Netstar Advanced Systems Sdn Bhd (40%) 

PHN Industry Sdn Bhd (35%) 

Marutech Elastomer Industries Sdn Bhd (25%) 

Vina Star Motors Corporation (Vietnam) (25%) 

Aluminium Alloy Industries Sdn Bhd (19%) 

Technomeiji Rubber Sdn Bhd (15%) 

Peps-JV Sdn Bhd (10.50%) 

Ara Borgstena Sdn Bhd (6.67%) 

Others 

Yayasan Proton 

Lotus Pension Trustees Ltd 

Lotus Cars Foundation 


25

Board of Directors 

26 


Datuk Zalekha 

Binti Hassan 

Dato’ Mohd Nadzmi 

Bin Mohd Salleh

Dato’ Haji Syed Zainal Abidin 

B Syed Mohamed Tahir 

Dato’ Michael 

Lim Heen Peok 

Tuan Haji Abdul 

Jabbar Bin Abdul Majid 


Tuan Haji Abdul 

Kadir Bin Md Kassim 

27

Profile of Directors 

Dato’ Mohd Nadzmi Bin 

Mohd Salleh 


Aged 55, Malaysian 

Dato’ Mohd Nadzmi Bin Mohd Salleh was appointed Chairman 

of PROTON on 1 January 2009. He is also the Chairman of 

various subsidiaries and Board Committees within the 

PROTON Group of Companies. 

28 

Dato’ Mohd Nadzmi, who graduated with a Bachelor of Arts in Economics from Ohio University, 

United States of America (“USA”), also holds a Bachelor of Science in Chemistry and Mathematics from 

Ohio University and a Master of Arts in Economics and Statistics from Miami University, USA. 

Dato’ Mohd Nadzmi began his career as a lecturer in the Faculty of Economic Resources and 

Agriculture in Universiti Pertanian Malaysia. Thereafter he held various executive positions in 

Petroleum Nasional Berhad and Heavy Industries Corporation Malaysia Berhad. He then left to join 

Edaran Otomobil Nasional Berhad as Manager in the Marketing Services Department in 1984, and 

later assumed the positions of Executive Director and Chief Executive Officer. In 1993 Dato’ Mohd 

Nadzmi was appointed Managing Director of Perusahaan Otomobil Nasional Berhad, a post he held until 

1996. 

Dato’ Mohd Nadzmi is also currently the Executive Chairman of Nadicorp Holdings Sdn Bhd, Express 

Rail Link Sdn Bhd, Trisilco Folec Sdn Bhd, and Chairman of J.T. International Berhad. He sits on 

the Boards of Ranhill Utilities Berhad, J.T. International Berhad, V.S. Industry Berhad, Konsortium 

Transnasional Berhad, Transocean Holdings Bhd and several private limited companies. 

Dato’ Mohd Nadzmi has attended all Board Meetings held since his appointment during the Financial 

Year. He has no conflict of interest with the Company and does not have any family relationships with 

any director and/or major shareholder of the Company. He has had no conviction for any offences 

within the past ten (10) years.


29


Dato’ Haji Syed Zainal Abidin 




Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir was 

appointed Managing Director of PROTON on 1 January 

2006. He also sits on the Boards of various subsidiaries 

within the PROTON Group of companies. 

Dato’ Haji Syed Zainal Abidin, who graduated with a 

Bachelor of Science in Engineering from the University of 

Maryland, USA, began his career as a Project Engineer with 

Petronas Gas Sdn Bhd in 1987, prior to joining Petroliam 

Nasional Berhad in 1992 as the Senior Executive of 

Corporate Planning & International Business Development. 

He then left to join HICOM Holdings Berhad in 1995, where 

he assumed various senior positions in the company. 

Dato’ Haji Syed Zainal Abidin lent his expertise to PERODUA 

when he was appointed Senior General Manager in 1999. 

Subsequently, he was appointed Executive Director of 

PERODUA Auto Corporation Sdn Bhd in 2002, and later 

promoted to Deputy Managing Director in October 2005. 

Dato’ Haji Syed Zainal Abidin has attended all Board 

Meetings with the exception of one (1) meeting held during 

the Financial Year. He has no conflict of interest with the 

Company and has no family relationships with any director 

and/or major shareholder of the Company. He has had no 

conviction for any offences within the past ten (10) years. 

30

Tuan Haji Abdul Jabbar Bin 

Abdul Majid 



Tuan Haji Abdul Jabbar Bin Abdul Majid was appointed as a 

Director of PROTON on 12 April 2004. He is a Fellow Member 

of the Institute of Chartered Accountants, Australia, as well 

as a member of the Malaysian Institute of Accountants. He 

is also a member of the Executive Council of the Malaysian 

Institute of Certified Public Accountants (“MICPA”). 

Tuan Haji Abdul Jabbar began his career in 1974 as Senior 

Manager in the Internal Audit and Organisation 

Department of Bank Pertanian Malaysia. In 1977, he 

joined KPMG Malaysia as Manager and was admitted 

to the partnership two years later. In 1993, he was promoted 

to Deputy Senior Partner and was made Senior Partner in 

1995, a position he held until his retirement in 2000. 

Tuan Haji Abdul Jabbar then joined Malaysia Derivatives 

Exchange Berhad in 2001 and retired as Executive Chairman 

on 28 February 2004. He was a past president of MICPA. 

He was an Adjunct Professor of the Faculty of Economics 

and Accounting of the International Islamic University and 

a member of the Senate of the Open University Malaysia 

Board. 

He is currently a member of the Board Audit Committee of 

the Company. Apart from PROTON, he also sits on the Boards 

of Tradewinds Corporation Berhad (“Tradewinds”), Opcom 

Holdings Berhad and Bank Muamalat Malaysia Berhad 

(“Bank Muamalat”). He is Chairman of the respective Board 

Audit Committees of Tradewinds and Bank Muamalat. 

Tuan Haji Abdul Jabbar has attended 8 out of 9 Board 

Meetings held during the Financial Year. He has no conflict 

of interest with the Company and has no family relationships 

with any other director and/or major shareholders of the 

Company. He has had no conviction for any offences within 

the past ten (10) years. 



31


Tuan Haji Abdul Kadir Bin 

Md Kassim 



Tuan Haji Abdul Kadir Bin Md Kassim was appointed to 

the Board of PROTON Holdings Berhad on 10 March 2005. 

He serves as the Chairman of the Board Risk Management 

Committee. He is also a member of the Board Audit 

Committee and Board Disciplinary Committee of the 

Company. 

Tuan Haji Abdul Kadir holds a Bachelor of Laws Degree from 

the University of Singapore. He served in the Malaysian 

Administrative and Diplomatic Service and in the Judicial 

and Legal Service between 1966 and 1973, holding various 

positions. He is currently the Managing Partner of Messrs 

Kadir, Andri & Partners. 

Tuan Haji Abdul Kadir is a director of Petroliam Nasional 

Berhad (“Petronas”), UEM Group Berhad, UEM Land Holdings 

Berhad, Suria Capital Holdings Berhad, TIME dotCom Berhad, 

Sino Hua-An International Berhad, Danajamin Nasional 

Berhad and Cement Industries of Malaysia Berhad. He is also 

a Director of a few private companies. 

He is Chairman of the Exchange Committee of the Labuan 

International Financial Exchange as well as a member of 

the Investment Panel of the Lembaga Tabung Haji and 

Corporate Debt Restructuring Committee. 

Tuan Haji Abdul Kadir has attended all Board Meetings 

held during the Financial Year. He has no conflict of interest 

with the Company and has no family relationships with any 

director and/or major shareholders of the Company. He has 

had no conviction for any offences within the past ten (10) 

years. 

32

Dato’ Michael 

Lim Heen Peok 



Dato’ Michael Lim was appointed to the PROTON Board on 

15 September 2006 and is a Member of the Board Executive 

Committee, Board Audit Committee and Board Nomination 

& Remuneration Committee. Dato’ Lim also sits on the 

Boards of various companies within the PROTON Group. 

After graduating with an honours degree in Engineering 

from the University of Strathclyde, United Kingdom, Dato’ 

Lim began his career with the UMW Group in 1975 in 

various senior managerial positions. In 1986 Dato’ Lim was 

appointed the Managing Director / Chief Executive Officer 

of UMW Toyota Motor Sdn Bhd, a joint venture company 

between UMW and Toyota Motor Corporation of Japan. 

Dato’ Lim retired in 2004. 

Currently, Dato’ Lim is the Chairman of Furniweb Industrial 

Products Bhd, an export oriented manufacturing company 

with plants in Malaysia and Vietnam. 

Dato’ Lim has attended 8 out of 9 Board Meetings 

held during the Financial Year. He has no conflict of interest 

with the Company and has no family relationships with any 

other director and/or major shareholders of the Company. 

He has had no conviction for any offences within the past 

ten (10) years. 



33


Datuk Zalekha Binti 

Hassan 

Non-Independent Non-Executive Director 


Datuk Zalekha Binti Hassan was appointed as a Director 

of PROTON on 11 February 2008. She is currently the 

Deputy Secretary General of Operations at the Ministry of 

Finance. 

She holds a Bachelor of Arts (Hons) from University 

Malaya. 

Datuk Zalekha was previously with Konsortium Baja 

Nasional Berhad, Tenaga Nasional Berhad, Putrajaya 

Holdings, Multimedia Development Corporation (“MDEC”) 

and Penang Port Sdn Bhd. 

Currently, Datuk Zalekha is a Director of Telekom Malaysia 

Berhad and Perbadanan Kemajuan Negeri Selangor 

(“PKNS”). 

Datuk Zalekha has attended 6 out of 9 Board Meetings held 

during the Financial Year. She has no conflict of interest with 

the Company and has no family relationships with any other 

director and/or major shareholders of the Company. She 

has had no conviction for any offences within the past ten 

(10) years. 

34




Encik Oh Kim Sun was appointed to the Board of PROTON 

Holdings Berhad on 13 May 2009 and Chairman of the 

Board Audit Committee on 1 June 2009. 

Encik Oh is a qualified accountant and member of the 

Malaysian Institute of Certified Public Accountants 

(“MICPA”). He began his career with Coopers & Lybrand 

in London and subsequently moved up the corporate 

ladder, assuming positions such as Finance Director of Taiko 

Plantations Sdn Bhd, Financial Controller of ICI Malaysia 

and Finance Manager (Secondment) of ICI’s Headquarters 

in London, overseeing Northern Europe. In 1994, he led 

the successful management buyout of ICI’s Malaysian 

operations and was appointed Group Executive Director of 

Chemical Company of Malaysia Berhad until 2003. 

Currently Encik Oh serves on the Board of Directors of several 

public companies namely, UEM Land Holdings Berhad (“UEM 

Land”), Pharmaniaga Berhad (“Pharmaniaga”), Faber Group 

Berhad (“Faber”) and Nikko Electronics Berhad (“Nikko”). 

He is also a Director of IMPAX Laboratories Inc (“IMPAX”), 

a company listed on National Association of Securities 

Dealers Automated Quotations (“NASDAQ”). 

He is the Chairman of the Audit Committees of UEM Land, 

Faber and Pharmaniaga as well as a member of the Audit 

Committees of Nikko and IMPAX. In addition, he is the 

Chairman of the Nomination and Option Committee of 

Nikko and serves on the Nomination and Remuneration 

Committee of UEM Land as well as the Investment 

Committee of Pharmaniaga. 

Encik Oh has no conflict of interest with the Company and 

has no family relationships with any other director and/ 

or major shareholders of the Company. He has had no 

conviction for any offences within the past ten (10) years. 



35

PROTON Group Management 

Committee Members 

Sitting (left to right) 

01 Hasnah Binti Ismail 

Director, 

Group Human Resource Division 

Standing (left to right) 

04 Tajul Zahari Bin Abu Bakar 

Director, Engineering Division 

36 

02 Dato’ Haji Syed Zainal Abidin 



05 Claudius Meynert 

Director, Export Markets Division 

03 Michele Kythe Lim Beng Sze 

General Manager, 

Group Legal Division 

06 Mohamad Shukor Bin Ibrahim 

Chief Executive Officer, 

Proton Edar Sdn Bhd

07 Dr Wolfgang Karl Epple 

Director, Group Quality Division 

10 Razif Bin Ahmad 

Director, Group Procurement Division 

08 Vimala Menon 

Director, Finance & Corporate 

Affairs Division 

04 

05 

06 

07 

01 02 03 

09 Mohd Nizamuddin Bin Mokhtar 

General Manager, Group Secretarial 

& Compliance Division 


08 09 10 

37

Other Senior Officers 

01 

04 

38 

02 03 

Heads of International Subsidiaries 

05 

10 11 12 

01 Muhammad Aris Bin Anuar 


Manufacturing 

02 Zahari Bin Husin 


Product Marketing 

03 Hazrin Fazail Bin Haroon 


Product Planning 

04 Datuk Abdul Razak Bin 

K P Dawood Sultan 


Group After Sales 

05 Peter Anthony Das 


Marketing & Branding 

10 Michael J Kimberley 

Chief Executive Officer, 

Group Lotus Plc 

11 Brian Collier 

Managing Director, 

Proton Cars (UK) Ltd 

12 John Startari 


Proton Cars Australia 

Pty Limited

08 Low Pheng 


13 14 

06 Dr Badrulhisham Bin 

Mohd Ghazali 

Senior Manager, 

Corporate Planning 

07 Muhammad Amyzaddin 

Bin Raya 


Group Corporate 

Communications 

Group Internal Audit 

09 Mohd Amin Bin Putih 


Group Risk Management 

06 

08 

13 Moses Tan 


Proton Singapore Pte Ltd 

14 Ricky Too Heng Keong 

President Director, 

PT Proton Edar Indonesia 

07 

09 


39

Steering Ahead

Steering Ahead 

The Company navigates 

through challenges and 

builds on strengths to 

scale new heights in 

PROTON’s quest to 

become a world class 

company. 


Chairman’s Statement 

42 

As the new Chairman of the Company and on behalf of the 

Board of Directors, I am pleased to present the Annual Report 

and Audited Financial Statements of the PROTON Group for 

the Financial Year ended March 31, 2009. 

Industry Overview 

The year under review witnessed a tremendous improvement in motor vehicle sales in the 

first six months from April 2008 to September 2008. This uptrend, which began from the 

second half of 2007, was a welcome relief to the industry but unfortunately the momentum 

could not be maintained. After recording peaks of more than 50,000 sales in April, July and 

September 2008, the Total Industry Volume (TIV) saw a significant drop of 21% in the second 

half of our fiscal year. From October 2008 until March 2009, monthly TIV struggled to breach 

the 40,000 mark due to the global economic meltdown marked by the collapse of major 

financial institutions in the United States. This was further compounded by the increase in 

petrol prices which reached its apex in October 2008 followed by the customary slow months 

of November and December. 

Despite the lagging industry sales in the second half of the year under review, the Malaysian 

Automobile Association’s (MAA) cautiously optimistic forecast of 510,000 for 2008 was 

decisively and pleasantly surpassed by a 7% margin when the TIV breached the 500,000 mark 

only for the second time when it recorded its second highest number in history of 548,115. 

In terms of segmentation, the performance of passenger car sales was simply 

record-breaking. MAA’s careful projection of 463,000 units was convincingly exceeded when 

the passenger car TIV registered sales of 497,459; the highest number achieved ever, an 

improvement of more than 12% compared to 2007, driven mainly by the positive consumer 

sentiments during the first nine months of 2008. 

Primary factors that contributed to the resurgence of the industry included the introduction 

of new models at highly competitive and consumer-friendly prices; attractive and creative 

financing schemes for car buyers as a result of aggressive sales campaigns; and a strong 

economic growth of 5.75% in 2008.




43


44 

Moving forward, MAA has forecasted a decrease in TIV to 480,000 for 2009 or a 12.4% 

decline, with passenger car TIV also estimated to shrink to 436,800 or a drop of 12.2% over 

2008. Although cautious, the forecast is well founded on the current global financial and 

economic climate, reiterated by the contraction of GDP growth. Other factors that might 

negatively impact car sales are the drastically fluctuating oil and commodity prices as well 

as unfavourable FOREX rates. 

Be that as it may, we are grateful for the Government’s recent announcement in March 2009 

recognising the automotive sector as being among the major industries with potential for 

further development, in light of its contribution to the growth of the nation. As part of the 

Second Stimulus Package, the Government was cognisant of the less than encouraging sales 

performance in the automotive industry, particularly in the second half of the year under 

review, with many companies in the automotive eco-system facing difficulties. In view of 

this, the Government generously allocated an additional RM200 million to the Automotive 

Development Fund to continue supporting the development of the automotive industry, 

in particular the vendor community, as well as to establish the Automotive Institute of 

Malaysia. 

PROTON at Hari Peneroka, Felda Maokil. 

To further underline its commitment to the sustainability of the industry, the Government, 

in a joint effort with the private sector, agreed to assist with the auto-scrapping scheme 

for PROTON and PERODUA. Under the scheme, a discount of RM5,000 will be given to 

car owners who trade in their cars of any make which are at least 10 years old for the 

purchase of new cars. The Government will finance part of the discount borne by PROTON 

or PERODUA. This scheme is intended to stimulate car sales as well as increase the safety and 

roadworthiness of the vehicles currently on the road, whilst reducing carbon emissions. 

Additionally, PROTON remained true to its philosophy of producing the right car at the right 

time, price and market, in our aspiration to become a regionally competitive automotive


company by creating value and earning customers’ trust through the quality and innovation 

of our products and people. 

We are aware that there is an increasing demand for compact vehicles which are 

competitively priced, economical, efficient and safe and on this premise, PROTON will 

continue to be creative and innovative in our sales and marketing strategies while offering 

products that cater to the needs of today’s consumers. 

Financial Performance 

The markedly improved market condition during the first half of the year under review saw 

an improvement in terms of sales and revenue for PROTON. With sales increase of 9%, our 

revenue was positively impacted with an increase of 15% compared to 2008. 

Nevertheless, we are mindful of the challenges to be faced in the next financial year and 

beyond. The gloomier second half of the year under review was a reflection and clear 

indication of the foreseeable future, which will be tough in light of the financial crisis 

which is greatly impacting the global automotive industry. 

In light of this, our immediate and prime concern is to reinforce PROTON’s foundation and 

strengthen its balance sheet in order to confidently strive forward and overcome obstacles 

in order to focus on and aggressively enhance our export programme. 

Accordingly, for the financial year ended 31 March 2009, PROTON recorded a loss after tax 

of RM301.8 million albeit on the back of improved revenue of RM6.5 billion. This decline was 

largely due to the one-off exceptional provision for the impairment of property, plant and 

equipment and inventory write-down for certain models impacted by declining demand. 

Additionally, PROTON’s financial performance for the second half of the financial year was 

also adversely affected by the accelerated amortisation of dies and jigs for certain models 

as well as higher commodity prices, increased costs of components and raw materials which 

arose from higher foreign currency exchange rates, particularly, the Japanese Yen and the 

US Dollar, coupled with allowance for doubtful debts. 

On a more positive note, the Group’s cash and cash equivalents as at 31 March 2009 was 

maintained close to the RM1 billion mark. This was after taking into account the various 

research and development (R&D) expenditure undertaken during the financial year to 

develop its recently launched first home grown multi-purpose vehicle, the Exora; initiatives 


45


46 

to take our successful Saga and Persona models into international markets; launch of product 

refreshers, namely the Persona SE and Satria Neo CPS; and commitment for powertrain 

development, further product refreshers, as well as new product introduction. 

In addition, PROTON has received an R&D grant from the Government amounting to 

RM81 million, under the National Automotive Policy (NAP), in recognition of the Group’s 

investment in R&D amounting to RM162 million. 

Dividends 

An interim dividend of 5 sen (less income tax) was declared on 27 November 2008 when 

PROTON announced the financial results for the second quarter ended 30 September 2008. 

The said dividend was paid to shareholders on 14 January 2009. 

In view of the need to ensure that PROTON is viably strengthened and able to achieve longterm 

and sustainable growth, the Board of Directors is not recommending the declaration 

of any further dividends for the financial year ended 31 March 2009. With improved 

profitability in the future, the Board expects to once again be able to recommend a suitable 

dividend payment.

Corporate Developments 

Expanding Product Range 


PROTON has during the course of the year under review, carried out various strategic and 

tactical initiatives aimed at reinforcing the foundation for future growth. 

Within the PROTON Group, Lotus Group International Limited (“Lotus”) unveiled the 

much-awaited Evora at the London Motor Show. Working on the concept of “The Practical 

Lotus Sportscar”, the Evora is the world’s only 2+2 mid-engined vehicle, powered by a 3.5 

litre V6 engine. With almost 300 deposits received prior to the price announcement and 

having received rave reviews from international motoring media, the Evora is well-placed 

to establish itself as the standard or benchmark in its car segment. To date, the Evora is 

in full production and expected to contribute positively to Lotus’ bottom-line in the near 

future. 

The Evora. 

A noteworthy mention is the involvement of a team of Malaysian engineers in key areas 

of the Evora project. Their participation not only brought an added dimension to the 

development of the Exora but further propagated knowledge sharing, thereby creating 

invaluable synergies within the Group. Invariably, the close working relationship between 

our Malaysian engineers and their Lotus counterparts will be a significant factor in creating 

ever-more competitive and appealing PROTON vehicles, moving forward. 

On this score, the Exora is already blazing new trails for PROTON since its official launch in 

April 2009. Being Malaysia’s very first MPV and PROTON’s latest addition to its stable, the 

Exora is proudly carrying our flag with its well thought out design, good built quality and 

robust safety features. To date, the Exora has surpassed even the most demanding market 


47


The Exora launch was officiated by the Prime Minister YAB Dato’ Sri Mohd Najib Bin Tun Abdul Razak in the presence of PROTON 

Adviser YABhg Tun Dr Mahathir Mohamad. 

48 

expectations. In terms of quality, the Exora is PROTON’s first model to breach the 80% CFC 

(Concern Free Car) level, continuing the uptrend which started with the Persona (at 31.8% 

CFC level) and was conclusively surpassed by the Saga, which recorded a staggering CFC 

level of 77.8%. 

I believe the success of the Exora will contribute positively to the Group’s bottom-line in 

the near future, and to sustain long-term growth, we will continue to take the next leap 

forward in terms of creativity, innovation and quality when it comes to introducing new 

products, both in the local and international markets.

Developing New Products 


To surmount a challenging industry and to appeal to an ever-discerning marketplace, 

PROTON must continue to produce exciting, market-centric, value-for-money products to 

win over the hearts of the consumers. In this respect, PROTON has embarked on various 

programmes to enhance its product line-up, with refreshers for the Saga, Persona, Waja 

and Gen.2 planned for the next financial year. Further ahead, plans are in place for the 

Waja and Perdana replacement models targeted to revitalise the hugely successful but 

aging models. 

To underline PROTON’s global competitiveness and to reaffirm our global reach, we have 

also embarked on a global small car programme which is crucial in our efforts to establish 

PROTON in the overseas market. Conceptually, this vehicle will be a competitively priced, 

small and trendy hatch, with a small capacity engine that meets all emission standards. 

At the same time, PROTON is also mindful that it has to enhance its powertrain to suit the 

needs of today’s regulatory requirements and the demands of a growing environmentallyfriendly 

and cost-conscious customer base. To this end, PROTON, together with Lotus, 

kicked off the aptly named Phoenix Project to ensure that our powertrain offerings will 

satisfy these needs and perfectly complement our cars. 

Expanding Exports 

PROTON continued to forge ahead in our quest to expand our reach and product offerings 

in key export markets during the year under review. To do otherwise would be detrimental 

to the Group given that our long-term success hinges on the brand’s ability to sell more cars 

well beyond the boundaries of our local market. 

We are well aware that the operating landscape for the passenger car industry globally 

will invariably be impacted by the global economic crisis. Fortunately, our export strategy 

over the past few years has been to focus on high-growth markets regionally and selected 

emerging markets, namely ASEAN, China, India, and the Middle East–North Africa; many 

of which are markets that have been relatively resilient from the fallout of the economic 

crisis. 


49


50 

In line with this export strategy, our locally-acclaimed Persona was successfully launched 

in Brunei, Australia, Indonesia, Saudi Arabia, Egypt and Syria during the fiscal year. The 

response in these markets has been and continues to be encouraging, to say the least. This 

positive support can be attributed to the growing recognition of the PROTON brand in 

these countries, the stylish and high-value attributes of the Persona, as well as excellent 

distribution and customer support. 

Strategic Initiatives Moving Forward 

Collaborations 

Minister of International Trade and 

Industry, YB Dato’ Mustapa Bin 

Mohamed visits PROTON. 

In furtherance of the Asian Multi-Local OEM (AMLO) strategy, PROTON collaborated 

with Saipa Co. of Iran to explore the possibility of joining forces in the areas of engine 

manufacturing, model development and R&D. The agreement will pave the way for 

PROTON to further develop its technology export initiatives, specifically for the Iran-Middle 

East markets. 

Still on Iran, which is one of the largest car markets in that region, PROTON has also signed 

an agreement with Zagross Khodro (Zagross) for the supply of automotive parts to the 

latter, our sole distributor in Iran. This is the third in a series of agreements, following the 

licensing, technical assistance and equipment purchase agreements, which allows Zagross 

to assemble the Gen.2 through a completely-knocked-down (CKD) arrangement. The first 

production of the model commenced in April 2009 at Zagross’ assembly plant in Borujerd 

city, southwest of Iran.


In China, PROTON has shipped more than 4,000 completely built-up Gen.2 units to 

Youngman. After the initial trial run in December 2008, the CKD supply and operations has 

commenced, opening a new chapter for PROTON in China. 

With Mitsubishi Motors Corporation (MMC) of Japan, PROTON entered into a product 

collaboration arrangement for the development of a new vehicle, which is targeted to hit 

the streets sometime in the near future. We certainly hope that this rekindled relationship 

with MMC will be mutually beneficial and at the same time accelerate PROTON’s product 

and quality programmes. 

PROTON Edar Sdn Bhd and Edaran Otomobil Nasional Berhad inked a new 

Master Dealer Agreement in May 2009. 


PROTON is aware that change, driven by technological advancement, environmental 

awareness, increasing fuel prices, fuel shortages and ultimately consumer needs and 

demands, is coming. Zero emission vehicles, as opposed to vehicles based on the internal 

combustion engine, conventional or otherwise, may soon be the order of the day. As more 

and more companies are scrapping their hydrogen programme, a pure electric vehicle or 

PEV seems to be the only viable alternative to achieve zero emission. 

Environmentally, it releases almost no air pollutants and there is less noise pollution than 

a vehicle powered by an internal combustion engine and potentially, with the proper 

infrastructure, it can be very inexpensive to run and maintain. 


51


52 

For small global players like PROTON, this is a window of opportunity for us to close the gap 

on the global giants, as no one has the clear advantage. OEMs with heavy investment in 

conventional internal combustion engines see the electric technology as a threat, whereas 

small players can seize this opportunity to catapult into the global arena. In view of this, 

PROTON has taken the first step by entering into a strategic relationship with Hong Kongbased 

Detroit Electric Holdings Ltd for the licensing and provision of our products and 

manufacturing services with the objective of mass producing PEVs for the United States 

and European Union markets. 

PROTON entered into a strategic partnership with Detroit Electric to manufacture 

pure electric vehicles. 

Prospects 

As we enter 2009, the global automotive industry is facing one of its stiffest challenges 

ever in history. The denominators for most of the OEMs in the world today are declining 

sales, tighter credit, increased global competition, higher cost of raw materials, and until 

recently, rising petrol prices, and growing consumer demand for more fuel-efficient vehicles 

are driving a transformation of the industry across its entire value chain.


The Detroit 3 (General Motors, Ford and Crysler) is in trouble and due to its intimate 

symbiotic relationship with the global automotive industry, there is no question that the 

automotive industry, is in turmoil. Their struggles will impact the OEMs around the world 

and as the financial crisis worsens, impacting OEMs, dealers and consumers, we will see 

a decline in consumer demand. Unlike previous years, when slow growth in the United 

States, Western Europe and Japan was offset by increased growth in the emerging markets 

of Russia, China, Eastern Europe and India, the global financial instability may result in 

declining sales in these emerging markets as well. And with declining sales, the entire ecosystem 

will be impaired. 

Thus, cash conservation and generation is imperative for PROTON and all players in the 

industry. We have to be vigilant and put cost-cutting measures in place. Additionally, 

initiatives that increase efficiency and disposal or shuttering of non-core assets and 

operations must be promoted and executed. 

Fuel efficiency will be the new buzz; small will be big and big will be small. As mentioned 

earlier, alternative fuel and green technology cannot be sidelined. Although a PEV will 

take some time in getting to the market and achieving commercial viability, in-roads 

have already been made. As more and more OEMs, traditional or otherwise, embrace the 

PEV, the desired scale could be achieved to meet the desired end commercially, and more 

importantly, environmentally. The secret to success is in the battery technology. The more it 

can store, the faster it charges, the more exciting the business model will become. 

Impaired by the credit crunch, we will see more creative and innovative collaborations 

between OEMs such as joint developments of platforms and powertrains or component 

sharing or capacity utilisation. Smart partnerships based on an asset light approach as 

propounded by our AMLO strategy are appropriate in the current economic situation. 

In short, there will be tough times ahead for the industry and for PROTON. However, with 

green shoots of an economic recovery emerging and the Government’s stimulus package 

coming on stream, coupled with a revival in consumer confidence in the PROTON brand 

driven by aggressive quality initiatives, as well as by placing ourselves on a firmer financial 

footing with the one-off exceptional provision made for the year under review, we are 

confident that PROTON will be able to weather this economic storm. We aim to do this 

by maintaining our focus on establishing ourselves as a truly global OEM in terms of sales, 

profitability, products, services, quality and capabilities. 


53


54 

The Exora is a testament of PROTON’s continued commitment to excellence. With the 

expansion of our product portfolio beyond our traditional passenger car segment, the 

Exora, together with the Persona and Saga, are expected to be significant contributors to 

PROTON’s growth. 

The Prize Presentation for the MPV Naming Contest. 

Acknowledgement 

We are at the cusp of a potentially dramatic change in the global automotive industry. 

With the Detroit companies facing a bleak future and other global automotive giants 

facing an unprecedented state of affairs, PROTON’s future, albeit testing, remains firmly 

in our hands. Responding to the difficult 2006/07 financial year with five consecutive 

profitable quarters and then to be faced with the current global economic meltdown, 

is discouraging and exigent. But at the core of PROTON we have people – our greatest 

assets – without whom our past would be unremarkable and our future unsustainable. 

For that reason alone, on behalf of the Board of Directors, I wish to convey our sincerest 

of appreciation to members of the PROTON family at all levels and across various functions 

and countries and to our extended PROTON family – our sales/service dealers and vendors; 

as well as our business partners domestically and internationally, for your perseverance 

and dedication throughout the challenges of the last few years. I am certain that we will 

continue as one to ensure our sustainability, relevancy and rightful place in history. 

On behalf of PROTON and its Board of Directors, I would also like to extend our thanks 

and appreciation to my predecessor, YBhg Dato’ Mohammed Azlan Bin Hashim, for his 

invaluable leadership and guidance during his years of service to the Group.

Flagging off the convoy in conjunction with Malaysia’s participation in the 

Singapore Open Super Series this year, with Badminton Association of Malaysia. 


At the same time, my sincerest appreciation goes out to our Board of Directors for its 

vision and commitment to guide PROTON in achieving our strategic objectives. We are also 

grateful for the support shown by our shareholders and confident that we will continue to 

strive ahead to enhance shareholder value in the long term. 

Our appreciation and gratitude also goes out to all our customers around the globe, 

as without your support, feedback, comments and criticisms, PROTON would not have 

been able to achieve what it has in the relatively short period of time, in becoming a 

full-fledged OEM. Rest assured we will strive to become a badge that owners are proud to 

own. 

Finally, we would like to extend our sincerest gratitude to our Prime Minister YAB Dato’ 

Sri Mohd Najib Bin Tun Abdul Razak; our adviser YABhg Tun Dr Mahathir Mohamad; 

our former Prime Minister YABhg Tun Abdullah Haji Ahmad Badawi; and the Malaysian 

Government for their continued support and guidance of PROTON and the Malaysian 

automotive industry during these tumultuous times. Without this support, our progress 

and the growth of the industry would have been greatly stifled and impaired. 

Thank you. 


Chairman 


55

Powering Growth

Powering Growth 

Opportunities abound 

for PROTON to bring 

innovation to life through 

the harmonious blend of 

technology, engineering, 

and manufacturing in 

products of quality. 


Managing Director’s Review 

58 

In reviewing the previous financial year, I am confident that 

PROTON remains well on-track to achieve its aim of becoming 

a world-class car manufacturer. This confidence stems from 

the fact that the Group has again proven its ability to design 

and manufacture products from start to finish that are well 

received by the market. 

Furthermore, we have made tangible progress in the area of quality, which is vital to the 

brand’s long-term growth and consumer acceptance. This was supported by a focused 

approach to drive greater cost efficiencies throughout our value chain while strengthening 

our vendor base and distribution network in an effort to enhance PROTON’s overall business 

eco-system. 

Collectively, these measured steps are integral to pushing PROTON to greater heights of 

success. Given that the industry’s current operating conditions may seem daunting and 

challenging both internally as well as externally, we must not lose sight of what has been 

achieved and keep our eyes firmly on the longer-term objectives. 

Whilst we have made progress, the journey still continues, and stakeholders can rest assured 

that the milestones achieved during the past years provide a positive indication that the 

future indeed looks encouraging for the Company and the brand. 

Product 

As a full-fledged automaker, PROTON is defined by its products. Hence, throughout 

the Group’s operational spectrum, we ensure that our products are conceptualised, 

manufactured and delivered in a way that will positively impact our customers experientially. 

In this respect, we have always believed that the value of the PROTON brand is in the sum 

of lasting impressions that we make on our customers.




59


60 

Thus, it is on this very basis that our nation’s first multi-purpose vehicle (MPV), the PROTON 

Exora, was developed. Catering to the needs of the contemporary Malaysian family, the 

PROTON Exora is an appealing blend of style, practical functionality, value-for-money and 

superior safety. 

The name for PROTON’s first MPV was unveiled in February 2009 following a Naming Contest. 

The highly encouraging response we have since received for the Exora todate underscores 

PROTON’s ability to develop winning products that will contribute positively to our bottomline. 

On the same note, our existing stable of vehicles, namely the Persona and Saga, were 

recognised for their winning qualities and values during the past year. 

We have what it takes to develop products that appeal to customers but in order to sustain 

top-line growth, we must make sure that our existing product range continues to do well 

in the highly competitive environment of today.


With this in view, we have updated and refreshed key models during the year under review. 

These include a Special Edition version of the Persona, which was introduced to enthusiastic 

response, and a “sportier” Satria Neo that captured the imaginations of trendy Malaysians. 

In addition, we developed several variants for our new Saga model to cater to niche but 

sizeable markets. 

Our acquisition of Lotus remains a valuable investment for us as we continue to further 

explore and utilise their engineering advancements and technologies to enhance our 

products and manpower skills. We have made positive progress in our technology transfer 

projects with Lotus, such as in vehicle driving dynamics, development of the electric vehicle, 

as well as powertrain and CamPro engine development. 

As we move forward, PROTON will maintain its momentum to introduce new products 

while updating our existing range. We will continue to invest in research and development 

as well as extensive market surveys to ensure that we keep on delivering products that 

are relevant. Product development projects include the incorporation of improved new 

technologies into our vehicles as well as exploration of new and alternative technology 

such as hybrid and electric vehicles. 

In summary, we aim to achieve a stable of well-proven and well-received products that will 

enable the brand to seize market share at home as well as abroad. 


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Quality 

Continuous quality improvement remains the mainstay for PROTON. While tangible results 

have been achieved over the years, as reflected in the significant reduction in customer 

concerns ratio for our vehicles, complacency in this area is not an option for the Group. 

During the year under review, various quality improvement activities were carried out 

throughout the organisation. We reintroduced a Group-wide Quality Campaign to drive 

home the importance of quality in the hearts and minds of PROTON’s management, 

employees as well as business partners. Quality improvement is a comprehensive process 

that has to transcend all aspects of our business in order to garner results. 

Additionally, we have taken significant measures to improve on customer engagement 

programmes, by increasing customer-focused activities and reaching out in order to acquire 

their views, suggestions and complaints as part of our improvement process. 

The financial year under review also saw the Group making headway with our customers 

by enhancing the quality of our customer-relations management (CRM). Our end-users can 

be our brand champions if they come away with a positive experience after every single 

interaction with the brand, including cases where we have to address concerns or issues. 

Also, in line with our aim to be more responsive to our customers, we have remained 

committed to our PROTON i-CARE customer service programme with the launch of the 

10th Servis Mesra outlet in Damansara Jaya, Selangor, in the second half of 2008. This 

programme is a key platform to enable us to deliver high quality after-sales services, which 

is paramount to building long-term brand equity. 

The focus on quality improvement was 

further enhanced during the Financial 

Year.

Cost Efficiency 


Cost management has become all the more important in this challenging operating 

environment where lower demand has been exacerbated by the increased cost of raw 

materials and components. 

In view of this, PROTON continued to strengthen collaborations within our product 

planning and development, manufacturing assembly, procurement and cost control 

departments to minimise wastage while maximising cost efficiencies. At the core of our 

cost efficiency measures is the reduction of the Bill of Materials (BOM) cost such as in 

carrying out global sourcing for major material suppliers beyond Malaysia. We have been 

identifying opportunities to tap into the supply chain of these major suppliers to reap the 

benefits of lower material costs. 

Apart from that we have also carried out development programmes for our existing 

vendors to improve and expand their manufacturing competency to include research and 

development capabilities. By reducing their costs of product development outsourcing, the 

vendors will be able to offer competitive prices of parts and materials not only to PROTON 

but to other major automotive players within and outside the country. 


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For material and parts sourcing, we have started to develop benchmarking and best 

practices guidelines in order to stay comparatively at par in terms of our procurements 

with other players within the industry. 

In addition, PROTON is committed to utilising a systematic decision-making process 

termed Value Analysis/Value Engineering or VAVE to secure raw materials and 

components at the greatest value, as opposed to cost, which will ultimately provide 

a long-term cost advantage to the Group. 

Domestic Market 

Operational cost efficiencies can also be derived from a strengthened distribution network. 

A new Master Dealership Agreement signed between our distribution arm PROTON Edar 

Sdn Bhd and Edaran Otomobil Nasional Berhad (EON) to rationalise the sales and services 

network of PROTON vehicles certainly emphasises this fact. 

The rationalisation aims to effectively reduce the number of sales outlets from 282 to 191 

and service outlets from 361 to 214 by end of 2009. The exercise will not only result in costsavings 

but improvements in the efficiency and productivity of our dealer network ecosystem. 

PROTON will have a unified and strengthened marketing, distribution and after-sales 

network, thus allowing us to compete more effectively and efficiently in the competitive 

marketplace of today. Ultimately we seek to improve on our customer satisfaction index 

(CSI) and service satisfaction index (SSI) not only in terms of ensuring better quality services 

but also greater efficiency in logistics arrangements. 

Export 

Apart from the local market, we have begun a more aggressive approach to capture export 

markets as defined under the Asian Multi-Local OEM (AMLO) strategy, namely, ASEAN, 

China, India and the Middle East-North Africa (MENA). We continue to concentrate on 

these high-growth regional markets for economies of scale and plan to make further inroads 

into these markets by leveraging on pre-existing trade and cultural linkages with 

Malaysia.

Launch of Persona and Gen.2 IAFM in Egypt in November 2008. 


During the year, we launched the Persona in Egypt, Saudi Arabia, Oman and Syria, as well 

as Indonesia. We also launched the Persona CNG and the Satria Neo CPS in Thailand, while 

we introduced the Saga in Brunei. 

In December 2008, we concluded a series of agreements with Zagross Khodro (ZK) of Iran 

which will allow ZK to assemble the PROTON Gen.2 model through a completely-knockeddown 

(CKD) arrangement in Iran. The agreement signifies our continued commitment to 

the vast Iranian market as well as the overall export market. 

PROTON will further strengthen export programmes particularly in ASEAN, China and the 

Middle East. We plan to introduce the Saga and Exora in all overseas markets in the very 

near future. 

Vendor Base 

Concurrently with the rationalisation of our distribution network, PROTON also made 

efforts to consolidate the vendor base with the aim of bolstering cost efficiencies and 

quality improvements. 


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As at the end of March 2009, our direct or first-tier vendors stood at a total of 221 compared 

to 260 in our 2006 financial year. The consolidation of our vendor network enables the 

Group to build stronger, more meaningful relationships with capable and competent 

vendors. In turn, we can leverage on greater economies of scale, while enhancing overall 

delivery quality. 

The vendor community will continue to play a very significant role in our journey forward. 

PROTON is committed to working even more closely with the vendors in order to improve 

their capability, efficiency and efforts in reducing the cost of components in the next 

financial year. 

PROTON also remains true to its Early Vehicle Involvement programme where vendors are 

encouraged to participate in the vehicle conception stage. The input we have received 

during this stage for the Persona, Saga and Exora have proved to be invaluable especially 

in the areas of component supplies and managing cost efficiencies. 

Moving Forward 

For us, the road ahead will continue to be challenging. The passenger car sector locally and 

around the world, including the markets PROTON has gained a foothold in, will continue 

to see softened demands as the pace for economic recovery remains uncertain. 

PROTON will have to be more assertive in communicating its products’ unique selling 

propositions to its markets both locally as well as internationally. Offering the “right car” 

at the “right time” and at the “right price” will have a universal appeal throughout all 

markets. 

We will also continue to look in detail at our entire business value chain as we search for 

innovative solutions to derive greater cost efficiencies. We will keep working with and 

encouraging our vendors and distributors to play an integral role in this area. 

At the same time, PROTON will continue to invest in human capital development by 

providing adequate training programmes to our workforce. The people in the Company 

must be fully exposed to best business practices in order to support our drive to build our 

presence in the export markets.

The media preview of Satria Neo CPS. 

Nevertheless, we believe that there are significant opportunities even during challenging 

times. The PROTON Group will work collectively as one to seize these opportunities and 

accelerate the brand to become one that is respected for its product and service quality. 

We have the foundation and nothing is impossible if we put our minds together towards 

enhancing the growth of the Company. 

On this note, I am pleased to present to you our Operations Review that highlights key 

developments and initiatives undertaken in the Group’s core areas during the year under 

review. 

I hope that you will find the Review informative and that it provides you with a clearer 

picture of our achievements and prospects todate. 

Thank you for your continued support of PROTON. 





67

Operations Review 

Engineering Services 

The cornerstone of any successful automotive company 

ultimately rests in the company’s engineering prowess. 

68 

It is the foundation that drives product development and innovation which are integral to 

enabling an automaker to not only survive but to thrive in this ever-challenging operating 

environment. 

Based on this premise, PROTON has remained committed towards advancing its engineering 

capabilities during the year under review. This was achieved via a steadfastness to 

pushing the envelope in developing new models and refreshing existing products, while 

continuously making progressive headway in research and development (R&D) as well as 

technical aptitude. 

Knowing Our Markets 

While PROTON continued efforts to shorten its learning curve on the engineering front, 

we were also mindful of keeping our customers’ needs in mind as we invested our energies 

in strengthening the Company’s engineering capacity. But no matter how good our 

engineering abilities, PROTON cannot develop a successful product without understanding 

our end-users. 

As such, throughout the past year, the Group deployed several teams of R&D engineers 

and technicians to key export markets, namely the Middle East, South Asia, South East Asia 

and China. The mission was to garner as much end-user details as possible including driving 

habits, road and weather conditions, as well as the needs and preferences of the individual 

markets.


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Product Development 

The Group’s financial year under review was punctuated by a historic milestone when we 

introduced the Exora, the first PROTON multi-purpose vehicle (MPV). In addition, the past 

year also saw a series of product refreshments to our existing line of vehicles that were 

tailored to appeal to an even broader market segment. 

Exora 

The Exora is a testament to the coming-of-age of the Group’s R&D and engineering 

capabilities. The model is the first in the Company’s 26-year history to be built without the 

feasibility prototypes and in a record time span of 18 months, which was a feat in itself. 

The Exora is PROTON’s answer to the booming Malaysian MPV market and it was built 

around our very own well-received CamPro CPS 1.6 liter engine. It features a hydro-formed 

sub-frame and lightweight front-end module as well as tailored blanked body parts which 

are able to reduce the overall vehicle weight while significantly improving its safety 

performance. Having surpassed all European crash regulations, the Exora is at par with the 

other MPVs in the market. 

70 

At the same time, the Group’s R&D homologation team worked tirelessly to keep abreast 

of regulatory and certification requirements in key markets. Collectively, the information 

gathered will be integral to ensuring that we develop products that are well in line with 

the markets’ needs.

While the Exora is technologically sound, it was also developed with the end-user in mind. 

Based on the “car for the people” concept, the Exora was designed to carry seven adults in 

an exceptionally comfortable and roomy interior that has separate air-conditioning vents, 

a must-have in hot climates. 

All in all, the Exora was created for practical daily use. It is meant to be safe on the 

road and withstand the rigours of everyday driving, while providing the space required 

for contemporary families of today. The Exora has already hit a chord with Malaysians 

and we expect it to continue surpassing expectations despite the challenging economic 

circumstances in other markets as well. 

The country’s first MPV, the Exora, made its debut in April 2009. 



71


Product Refreshments 

Persona SE 

The Persona, which was introduced in 2007, continues 

to receive encouraging support from its market 

segments. This is a reflection of its robust builtquality 

as well as appealing contemporary lines and 

contours. 

To sustain and leverage on the interest in this winner, 

PROTON introduced the enhanced Persona Special 

Edition (SE) in August 2008. The newly elegant SE is 

powered by the CamPro IAFM Engine which offers a 

smoother torque curve. At the same time, its interior 

has been enhanced with leather seats, steering wheel 

wrap as well as new gear knob and trims. The SE also 

features several must-have gadgets such as racinginspired 

meter and dials, auto cruise control and GPS 

navigation kit. 

Meanwhile, the exterior of the SE boasts a stylish body 

kit, smoked headlamps, silver matte door handle, 

front and rear garnish, and new alloy-rim designs. 

Overall, the Persona SE provides end-users with valuefor-money 

comfort and premium accessories. 

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Saga NGV 

Sky-rocketing petrol prices in 2008 propelled the 

rise of the economically practical natural gas vehicle 

(NGV). While petrol prices have since plunged 

dramatically, prices are expected to strengthen in 

the long run, marking positive prospects for the NGV 

market. 

On this score, PROTON has been investing time and 

effort in NGV development programmes focused on 

the Saga since 2007. This initiative came into fruition 

with the launch of the Saga NGV variant, which is 

powered by a 1.6L CamPro IAFM engine. 

Being a specially-configured NGV, as opposed to an 

add-on or “modified” version most commonly seen 

on the road, the Saga NGV is able to cater to the 

growing NGV demand from both commercial and 

private car users locally and internationally.

Saga 1.6L Taxi 

In line with the new regulation that requires all 

Malaysian taxis to be powered by engines above 

1500cc, PROTON successfully developed a new product 

variant, the Saga 1.6L, during the financial year. The 

Saga 1.6L features the CamPro 1.6L IAFM engine, 

which is well-suited for the demanding requirements 

of taxis. This variant will offer the country’s taxi fleet 

a viable option to replace ageing vehicles. 

Satria Neo CPS 

“Sporty, Youthful and Power” were the ideals 

promised by the enhanced Satria Neo CPS, which was 

unveiled in the first quarter of 2009. These ideals were 

delivered in the form of a brand new performanceoriented 

CamPro CPS engine, which pushes 125 

horsepower or a 13.6% increase in output over the 

standard engine. 

In addition, the Neo CPS also features improved 

drivability, whereby the engine adapts to its user’s 

driving style by automatically switching on the 

“Power Mode” when required. Coupled with the 

stylish body kit reminiscent of the original Satria GTi, 

as well as “race car” trappings of red-accent leatherwrapped 

steering wheel, leather seats, door trims 

and sporty gear knob, the Neo CPS has become an 

instant hit amongst young and trendy Malaysians. To 

cap it off, the Neo CPS proudly bears the “Handling by 

Lotus” badge at its rear to show its proven pedigree 

in international race events including the Merdeka 

Millenium Endurance Race (MME) and the Asian 

Touring Car championship. 

The trendy enhanced Satria Neo CPS. 



73


R&D – Towards Technology Advancements 

Electric Vehicle (EV) 

The automotive industry worldwide is going “green”. This trend has become more 

pronounced over recent years due to several factors including the growing public concern 

on safeguarding the environment. This has led to regulations by various Governments to 

curtail carbon emissions and skyrocketing fuel prices, as well as the global economic crisis 

that has fueled the need for more efficient, economical vehicles. 

In view of this, the Malaysian Government has also been pro-active in encouraging the 

development of alternative fuel vehicles including electric powered vehicles. In answering 

the Government’s call, PROTON’s R&D team, along with its counterparts in Lotus 

Engineering, United Kingdom, developed two EV prototypes during the year under review. 

The prototypes were based on two models: the Persona as a performance EV and the Saga 

as a city-practical EV. 

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PROTON has made in-roads in the development of ‘green’ vehicles.

Skilled human capital is vital in enhancing PROTON’s engineering capabilities. 

Collaborations with Centres of Education 

Given PROTON’s role as a national automaker, the Group’s long-term strategy includes 

collaborating effectively and efficiently with local education institutions in the area of 

advanced automotive technology. 

These collaborations, which are primarily in components, manufacturing and quality 

management, are integral to developing and enhancing our country’s human capital 

expertise in automotive engineering and technology. At the same time, the collaborations 

are providing the Group with a cost effective R&D platform via the sharing of resources 

including human resources and facilities. 

Towards this end, the year under review was marked by a notable agreement sealed 

between PROTON and Universiti Teknologi Malaysia (UTM) to promote the exchange of 

technical expertise and information as well as to support the development of up-to-date 

R&D facilities, and coordinate advanced research initiatives. This partnership will play a role 

in augmenting PROTON’s R&D processes with a view to bringing products to market more 

rapidly. 



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Fostering Technology Development 

In addition to strategic collaborations with institutions of higher learning, the Group is also 

spearheading efforts to entice young Malaysians to the field of automotive engineering 

and R&D. 

In line with this objective, PROTON successfully organised the first Technology Week in the 

second half of 2008. The event, which was officiated by former Prime Minister YABhg Tun 

Abdullah Bin Haji Ahmad Badawi, was a platform to showcase the Group’s engineering 

capabilities and production facilities in order to inculcate a better understanding and 

interest in automotive technologies. 

PROTON’s Technology Week 2009 featured numerous activities including technical 

presentations at our state-of-the-art Virtual Reality (VR) Centre, exhibition on computeraided 

vehicle design and engine construction as well as vehicle testing sessions at PROTON’s 

test track, which proved to be a major attraction for the visitors. 

At the end of Technology Week, the event had recorded some 50,000 visitors, comprising 

mainly faculty members and students from our country’s leading universities and education 

institutions as well as school students and the general public. 

PROTON launches its three millionth car during the Technology Week.

Our R&D capabilities have led to world-class 

breakthroughs like the CamPro engine. 

Recognition in R&D 


PROTON’s R&D team has played a crucial role in developing products that are practical, 

value-for-money and enjoyable. It indeed takes a colossal team effort to develop a product 

that not only surpasses safety standards but also resonates with end-users in terms of the 

overall driving experience. 

In recognition of the R&D team’s efforts, the Group successfully clinched the Malaysia Good 

Design Mark Award 2009 for the Satria Neo and Persona models. The award, in its 12th year 

and spearheaded by the Ministry of Science, Technology and Innovation via the Malaysian 

Design Council, acknowledges positive contributions made by the industry in the areas of 

R&D and product development. 

PROTON team is recognised for R&D achievements. 


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Manufacturing 

The Group is fully cognisant that manufacturing excellence 

is essential to sharpen PROTON’s competitive edge in today’s 

increasingly challenging environment given the more 

sophisticated customer base. 

78 

To achieve new levels of excellence in spite of tough economic conditions, the production 

landscape at PROTON has had to evolve, especially in view of manufacturing new products 

such as the iconic Saga and Malaysia’s first home-grown multi-purpose vehicle (MPV), 

the Exora. The Group, as such, implemented several manufacturing processes to enhance 

quality and production levels to better meet the discerning needs of customers locally and 

globally. 

During the period under review, owing to a high number of bookings for the Saga, 

the main plant in Shah Alam had to implement two shifts for the production of 6,122 

units in April. Production volume was subsequently increased to 8,000 units a month 

by September 2008. 

Production volume at the Tanjung Malim factory also saw an increase with the introduction 

of the Persona Special Edition (SE), a restyled version of the original Persona. However, due 

to the global economic meltdown in demand, sales of new cars dropped significantly in the 

second half of 2008. By December 2008, the plant in Tanjung Malim returned to a one-shift 

operation which was subsequently adopted by the main plant in January 2009.


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These measures were not only necessary to reduce cost and improve efficiency but also in 

preparation for the production of the Exora in Shah Alam. As a result, the excess manpower 

from Tanjung Malim was transferred to the Medium Volume Factory (MVF) in Shah Alam 

and no new recruitments were necessary. However, in order to handle the production of 

the Exora, which was launched in April 2009, the Waja production line at the MVF had to 

be discontinued in July 2008. 

Notwithstanding these challenges, PROTON achieved a production volume of 157,643 units, 

representing an increase of 16% over the previous financial year. This comprised 87,053 

units at the main plant, 3,932 units at the MVF and 66,658 units from the Tanjung Malim 

plant. Delivery increased to 157,211 units, of which 139,824 units were for the domestic 

market. This marked an increase of 23,094 units compared to the previous financial year. 

PROTON’s channel stock position also increased to 17,925 units from 13,262 units. This is 

likely to remain until new cosmetic changes are implemented to create fresh excitement in 

the market. Production plans are also being continuously adapted to suit market conditions 

and to reduce further the stock channel. 

The production volume is forecasted to increase by 4,789 units to 162,000 units in the next 

financial year. This is premised mainly on the strong demand for the newly launched Exora 

and the plan for more PROTON models to be upgraded.

2009 Annual Report - ChartNexus

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