2009 Annual Report - ChartNexus

Chairman’s Statement
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.
PROTON 2009 ANNUAL REPORT
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