Proton to set up factory with Geely in China to penetrate market there

  • Nation
  • Saturday, 18 Aug 2018

HANGZHOU: Proton Holdings has signed a deal with Zhejiang Geely Holding Group (Geely) to set up a manufacturing plant in China.

The facility will be a joint venture between the two carmakers with both companies taking up equal equity.

"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 agreement also provides for existing Proton platforms that are found suitable to be developed into models for the Chinese market,” said DRB-Hicom Group managing director Datuk Seri Syed Faisal Albar during the signing ceremony in Geely headquarters here on Aug 18.

The event was withnessed by Dr Mahathir Mohamad, who is currently on his official visit to China.

Both parties aim to incorporate the joint venture within the first half of 2019.

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

In 2008, 6.76 million passenger cars were sold in China, but it has grown to over 24 million units in 2017.

Geely – the leading player in the local China market – is the first privately-owned Chinese carmaker to sell over one million units domestically in a calendar year.

Syed Faisal pointed out that Geely’s entry as a strategic partner to Proton via a 49.9% stake has paved an easier route for the Malaysian national car’s entry into the lucrative Chinese market.

At Geely, Dr Mahathir was introduced to several models of car produced by the company.

In order to take Proton beyond Malaysia, Zhejiang Geely Holding Group said in a statement on Saturday (Aug 18) that it will allow Proton to tap its green car technology, as well as basic vehicle platform technologies which Geely has developed jointly with its wholly owned unit Volvo Cars of Sweden.

Using Geely’s technology, the Malaysian firm wants to make and sell upgraded Proton cars in international markets, starting with China but also in other markets such as Indonesia, according to a person familiar with the matter, reported Reuters.

Besides China and Indonesia, the person said Proton is also looking at the possibility of entering other South-East Asian countries, as well as global markets with a similar line-up of new upgraded cars.

Geely’s investment is intended to help Proton grow its sales overseas and recover some of the global presence it has lost in recent years.

By offering some of its own technology, Geely has hopes it can also lift Proton sales in right-hand-drive markets, including Britain, India and Australia.
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