On May 24 last year, Geely Automobile and DRB-Hicom Group signed an agreement which saw Geely Automobile holding 49.9% stake in Proton, while the remaining 50.1% stake remained with DRB-Hicom. In September last year, there was an official announcement that Dr Li Chunrong from Geely Automobile was to be appointed the Chief Executive of Proton. This news was not positively greeted by the locals with many saying that Proton was no longer qualified to be considered a domestically produced brand.
In fact, as we all know, Proton was established in 1983. It is a wholly-owned subsidiary of DRB-HICOM Group and the largest automobile company in Malaysia. In fact, Proton is the only vehicle manufacturer in Southeast Asia with its business covering the UK, the Middle East, Southeast Asian region and also Australia. The Proton brand was arguably Malaysia’s most famous brand for the last three decades.
However, in recent years, Proton has been facing losses amidst competition from other automotive brands. There were several attempts to revive its flagging car sales during the slowdown period which did not see much success. Nevertheless, Proton had a Southeast Asian region and international presence and it still attracted investors from overseas.
For this reason, Geely Automobile successfully acquired 49.9% stake in Proton and became its second-largest shareholder besides being a strategic partner with DRB Hicom. The two parties stated in the agreement that the two sides will start extensive and in-depth cooperation, fully coordinating technical resources, merging technologies and expertise in order to support and promote the transformation of Proton and Lotus. Under the agreement, both parties will also be committed to continuously improve the technological innovation capability and market competitiveness of Proton, and strive to build it as the leader in domestic automobile brand with the largest market share in Malaysia and the frontrunner in the Southeast Asian automobile market. Geely Automobile has also announced that it will introduce Proton's first sports utility vehicle (SUV) which was a mirror model to its successful Boyue SUV back in China. The Malaysia Proton SUV is slated for launch in the fourth quarter of this year. The locally assembled model is expected to boost Proton’s sales as it allows locals to purchase quality cars at affordable prices. With the ongoing production of the Proton SUV model to supply the local markets, it is also expected to create more job employments particularly at the factory in Tanjung Malim.
In addition, the merger with Geely will also benefit and provide Proton with advance technology and prototypes such as those developed for Volvo, Emgrand and Boyue. For Geely, the sale of the SUV in Southeast Asia, South Asia and Australia under the Proton brand opens up its foray into the right-hand drive market. From here onwards, one would expect Geely to make good use of Proton’s Tanjung Malim's high-capacity factories to help them produce more vehicles and sell them to the UK, Australia and other markets at a more competitive price.
With employment opportunities for the local, sharing of technology and resources, launch of better vehicle models, restructuring of company resources, one can only imagine that the strategic partnership between Proton and Geely is bound to benefit both parties in the long run.
Durian Boy