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 agreement also provides for existing Proton platforms that are found suitable to be developed into models for the Chinese market,” said Proton Holdings chairman Datuk Seri Syed Faisal Albar during the signing of the agreement in Geely headquarters here yesterday.
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.
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