Proton Holdings Bhd and Japan's Mitsubishi Motors Corp (MMC) are in talks on strategic collaboration to further strengthen their competitiveness in the global marketplace.
Proton Group Managing Director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said that the two parties were discussing joint production of engines in Malaysia and consignment production of MMC-brand vehicles at the Proton factory.
Proton Group Managing Director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said that the two parties were discussing joint production of engines in Malaysia and consignment production of MMC-brand vehicles at the Proton factory.
Giving more detail to that, here are the remark from the MD himself.
“The collaboration will also see the sharing of major parts and components between MMC's Global Small Car (GSC), which is to be launched next March starting in Thailand, and Proton's upcoming Global Small Car (GSC) and also provision of MMC's future technologies such as electric, plug-in hybrid and hybrid vehicle technology”he said at a press conference after the group's AGM yesterday. Most of the automakers around the world are developing their GSC. Same goes with Proton and Lotus. Definitely, Proton and its fully own sub-company, Lotus is developing the GSC together by utilizing the same platform but with few design differentiation. Instead of GSC, Lotus prefer to use the term Lotus CityCar (LCC). Holistically, there are plenty of rooms for PROTON, MMC and LOTUS to share parts for their products.
Syed Zainal said that for a start, the parties would jointly invest in a power train to produce engines for MMC's vehicles. The details of the venture would be finalised in the next two months.
Proton chairman Datuk Seri Mohd Nadzmi Mohd Salleh said that in collaborating with MMC, there would be no need for either company to swap equities or exchange shares.
“This joint investment will help Proton reduce development cost and time, thus minimising our investment,”he said.
Proton chairman Datuk Seri Mohd Nadzmi Mohd Salleh said that in collaborating with MMC, there would be no need for either company to swap equities or exchange shares.
“Both companies stand to gain with the economies of scale, which will lower the cost of development,”he said. These days of globalization era, it is normal to have strategic collaboration by sharing parts, platform and production line. And those are not necessarily involving either share swap deal or equity exchange at all. This approach will enable Proton to have flexibility to make collaboration with anyone at anytime without limitation of how many company they want to work with.
Elaborate furthermore about this collaboration, it is really a win-win situation where for Proton;
1. PROTON can have more reliable engine compare to current Campro engine.
2. PROTON can have wider range of engine dispalcement (remark: currently Campro come with 1.3l & 1.6l only while MMC has a wide range of engine line-up).
3. PROTON possibly can 're-style' ('re-badging with minor styling change) MMC model as Proton model, especially for low volume segment (like Proton did for Inspira).
As for MMC;
1. MMC can have less taxation in ASEAN region due to the localization of few parts and CKD assembly.
2. MMC can utilize Proton production plant which having almost same setting (CAN-BUS diagnose area etc..) with their plant, thanks to the Inspira project.
3. Able to get royalty for any engine or platform use by Proton.
Generally, from my point of view, it will benefit Proton a lot than it will benefit MMC. Just to remind that, MMC has an option to do the assemblies in Thailand as well because they already have plant over there. But, they chose Malaysia anyway.
Additionally, with this collaboration we think that Proton might not be producing their own engines anymore. It is agreeable of their approach to save cost on development and risk on technical capability.
Finally, what model to be assembled by Proton as MMC product? It definitely should include the small SUV, Mitsubishi ASX (also known as RVR in Japan). Probably, we can see more ASX on the road in Malaysia in coming years. Or maybe we can see Proton ASX version with re-styled bumpers? (we know that Proton does not have SUV in their product line-up yet..) Cool...!
1. PROTON can have more reliable engine compare to current Campro engine.
2. PROTON can have wider range of engine dispalcement (remark: currently Campro come with 1.3l & 1.6l only while MMC has a wide range of engine line-up).
3. PROTON possibly can 're-style' ('re-badging with minor styling change) MMC model as Proton model, especially for low volume segment (like Proton did for Inspira).
As for MMC;
1. MMC can have less taxation in ASEAN region due to the localization of few parts and CKD assembly.
2. MMC can utilize Proton production plant which having almost same setting (CAN-BUS diagnose area etc..) with their plant, thanks to the Inspira project.
3. Able to get royalty for any engine or platform use by Proton.
Generally, from my point of view, it will benefit Proton a lot than it will benefit MMC. Just to remind that, MMC has an option to do the assemblies in Thailand as well because they already have plant over there. But, they chose Malaysia anyway.
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