Local media reports in Malaysia suggest that DRB-Hicom owned Proton could be looking for a strategic partner in China with Geely emerging as a possible suitor following talks.
Proton is looking to revive its dominance of the domestic market under the chairmanship of Mahathir Mohamad, who was Malaysia’s prime minister when the car company was formed in 1983.
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By 2001, Proton enjoyed a 50% domestic market share but this has since slipped to 20% against increased competition, removal of tarriff barriers and perceived poor quality. Even this market share is propped up by a government requirement that its cars are used for taxi vehicles.
The Malaysian financial daily The Edge reported that Mahathir, who is now 88, has said there is no need for government assistance for Proton and is seeking help elsewhere.
In April, he flew to China with Syed Mokhtar Al-Bukhary, head of the Malaysian conglomerate DRB-Hicom, which owns Proton., where they met with political and business leaders. According to local media, Mahathir is crafting a partnership with Chinese carmaker Geely.
The current Malaysian prime minister Najib Tun Razak has said that partnership negotiations are making headway although specifics of the deal with Geely have yet to be disclosed. Najib has hinted at the possibility of Proton manufacturing Geely-designed vehicles.
Geely owns Sweden’s Volvo and Mahathir wants to use this connection to help improve quality at Proton, helping it to boost exports to rapidly growing countries in south east Asia, as well as recapture its dominant domestic market share.
