Proton could build a plant in China to boost exports

Proposal for the plant is expected to be discussed when Dr Mahathir visits Beijing next month


Proton Holdings Bhd could open a plant in China as part of a proposal with its Chinese partner and expansion plan, opening the Malaysian carmaker to the world’s largest car market, according to a source.

The carmaker which was formerly owned by the government, has struggled to penetrate foreign markets with exports accounting for a small percentage of its delivery.

Proton had depended heavily on the local market, but the opening of the segment to other makes of similar car category saw its fortune tumbled. Carmakers sold 24.1 million vehicles in China last year, or almost six times the number of automobiles sold in Japan.

The proposal to allow Proton to have a plant in China is expected to be discussed when Prime Minister (PM) Tun Dr Mahathir Mohamad visits Beijing in August, said the source. Dr Mahathir is also expected to meet officials from Proton’s 49.9% shareholder, Zheijang Geely Holding Group Co Ltd, during the trip.

The PM, who was Proton’s former chairman, is expected to discuss the proposal to open a China plant when he meets Geely officials, said the source with knowledge of the matter. “The discussion would also expand on how Geely and Proton could participate in the Indonesia- Malaysia car joint-venture (JV) project,” said the source.

Dr Mahathir is expected to visit China next month, the third country visited by him since he was appointed for the second time as the country’s PM. Japan and Indonesia were the first two countries visited by Dr Mahathir.

During his visit to Jakarta at the end of last month, Dr Mahathir and Indonesian President Joko Widodo, or Jokowi, agreed in principle to explore a joint Indonesia-Malaysia car project.

A similar venture was mooted by Dr Mahathir in 2015. Dr Mahathir, who spearheaded Malaysia’s industrialisation with the Proton car project more than 30 years ago, was made a persona-non-grata in the national car, literary killing the proposed car project between Proton and Indonesia.

During his meeting with Jokowi at Jakarta’s Bogor Palace, Dr Mahathir said the Indonesian president was keen to explore the JV car project.

Indonesia is South-East Asia’s largest car market, selling about 1.1 million units — double the size of Malaysia’s total vehicles sales of around 590,000 units this year.

South-East Asia is turning into a lucrative region for carmakers with about 3.36 million vehicles sold last year as the region experiences an economic boom and rising wealth among its 600 million population.

Indonesia’s 261 million population provides a good opportunity for an Indonesia-Malaysia vehicle.

The source said the partnership with Jakarta over the joint car project, if it materialises, will see the plant being constructed in Indonesia.

Proton chairman Datuk Seri Syed Faisal Albar Syed Ali Rethza Albar on Tuesday said the company will revisit its proposal to jointly develop an Indonesian national car.

He said Proton will proceed with discussions with an Indonesian company, following a heads of agreement that was signed in 2015.