FINALLY MAHATHIR IS HAPPY: ‘WHEN PROTON WAS FIRST PRODUCED, GEELY WAS NOWHERE AROUND, NOW THEY HAVE OUTSTRIPPED US’ – PM GIVES THUMBS UP AFTER TEST-DRIVING GEELY CARS, TAKES BULLET TRAIN WITH SITI HASMAH TO SHANGHAI

HANGZHOU: Proton Holdings Bhd is entering the world’s biggest automobile market after signing a deal for the setting up of a manufacturing plant in China.

The facility will be a joint venture with Zhejiang Geely Holding Group (Geely), with both companies taking up equal equity.

This includes the setting up of a production facility for Proton to assemble and market its cars in China.

“The portfolio of cars for China will primarily come from existing Geely platforms, although the external design of the vehicles will be undertaken by Proton.

The event was witnessed by Prime Minister Tun Dr Mahathir Mohamad, who is currently on a five-day working visit to China.

Both parties target to incorporate the JV within the first half of next year.

Syed Faisal said Geely’s entry as a strategic partner to Proton has paved an easier route for the Malaysian national car’s entry into the lucrative Chinese market.

Dr Mahathir said he had seen tremendous improvement in Geely cars in terms of its quality and productivity in recent years.

“When Proton was first produced, Geely was nowhere around. We sent six Proton cars to China, and we were very proud of our achievement,” said the premier.

“But as you know, Geely has now outstripped us. And I think, working together with Geely would bene­fit and accelerate the process of bringing improvements to Proton cars.”

Dr Mahathir acknowledged that Proton had been trying to get into the Chinese market for quite some time.

“But we produce right-hand drive cars that are not acceptable in China, so we need to produce left-hand drive cars, preferably in China because the cost here seems to be lower.

“Besides, I think that we need quality cars and those that will be produced by Proton together with Geely, will be of better quality than what we presently have in Malaysia,” he said.

To a question, he said based on what he had seen, Geely, which holds a 49.9% stake in Proton, is capable of producing electric cars with Proton for the Asean market and beyond.

China’s passenger car sales have grown tremendously over the last 10 years.

In 2008, only 6.76 million units were sold in China, but it has grown to over 24 million units as of last year.

Geely is the first privately-owned Chinese carmaker with annual sales of over one million units domestically.

Lotus and Volvo are among other marques in Geely’s stable.

The company also holds a substantial stake in Daimler, which produces Mercedes-Benz.

Boyue, the localised version of the SUV, is set to be launched in Malaysia by the end of this year as Proton’s first-ever SUV.

Earlier during the tour of the Geely headquarters, Dr Mahathir test-drove three vehicles, including an electric car.

Later, he took a high-speed train from here to Shanghai, a journey of about 150km, before boarding a flight to Beijing.

GEELY TO ASSEMBLE, MARKET PROTON CARS IN CHINA

Momentous occasion: Dr Mahathir witnessing the signing of the agreement between Syed Faisal (second, left) and President of Zhejiang Geely Holding Group An Conghui (second, right) at Geely headquarters in Hangzhou, China. — Bernama

PROTON Holdings Berhad and Zhejiang Geely Holding Group today signed a agreement to set up a joint venture that will pave the way for Proton to assemble and market their cars in China.

Both companies will take up equal equity in the joint-venture (JV) company and target to incorporate the JV within the first half of 2019, subject to obtaining all regulatory approvals.

DRB-Hicom Berhad said in a statement today the venture includes the setting up of a production facility in China to assemble vehicles, and the development of a network of dealers to market the Proton range in China.

The portfolio of cars for China would primarily come from existing Geely platforms, although the external design of the vehicles will be undertaken by Proton.

The agreement also provides for existing Proton platforms to be developed into models for the Chinese market.

DRB-Hicom group managing director Syed Faisal Albar said Geely’s entry as a strategic partner to Proton has paved an easier route for Proton’s entry into the lucrative Chinese market.

“Clearly with Geely on board, Proton’s route into China has become more tenable. Part of Geely’s role is to secure the manufacturing licences and regulatory approvals required for such a venture under China’s regulations.

“Geely will also identify a suitable location where the manufacturing facility is to be based,” Syed Faisal said.

He added that existing Proton component vendors that have quality and a competitive edge would be considered as suppliers for the JV company.

“This should sit well with the government of Malaysia that has often prodded Malaysian component makers to venture into the Chinese market.

“Prime Minister Dr Mahathir Mohamad had lamented previously the lack of Malaysian car exports into regional markets, despite Japanese, Korean and Chinese brands making their way onto Malaysian shores,” he said.

China’s passenger car sales have grown tremendously over the last 10 years, to over 24 million units in 2017, compared to 6.76 million units in 2008.

Geely, the first privately-owned Chinese carmaker, sold over 1.0 million units domestically, selling more than 1.24 million units last year, carving out a 5.06 per cent market share.

In the first six months of 2018, Geely moved an average of over 125,000 units of their models a month, with the Boyue SUV passing the 20,000 mark every month except in January, when more than 30,000 Boyue SUVs were sold.

The localised version of the SUV is set to be launched in Malaysia in the final quarter of 2018 as Proton’s first-ever SUV.

– Bernama