Proton shortlists five potential foreign partners

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proton-logoMalaysian carmaker Proton, which is on the search for a potent foreign partner to revive its ailing business, this week shortlisted five potential foreign partners for a tie-up in the form of a minority stake acquisition.

While Proton did not disclose the names of the companies, it is understood that Suzuki, Volkswagen’s Skoda unit, Peugeot-Citroen and Renault are among them, as well as one of the company’s current partners, Mitsubishi, Honda and China’s Youngman.

In any case, Proton will remain a Malaysian company with investment holding DRB-Hicom remaining its substantial shareholder. The deal should be closed by the first quarter of next year.

DRB-Hicom, which is involved in the auto, banking, services and property sectors, took over Proton from the Malaysian government in 2012, but failed to resuscitate the carmaker. The government had to give Proton a $312 million loan earlier this year on condition that it seeks a strategic partner.

Proton was established in 1983 as Malaysia’s first national car brand, although is largely used Mitsubishi’s technology at that time, while it later developed its own cars. Sales peaked in the early- to -mid-1990 when Proton reached a domestic market share of two-thirds.

However, after the Asian financial crisis, Proton’s fortunes dwindled, with its market share falling continuously due to quality issues and stronger competition in the low-price car segment. According to statistics by the Malaysian Automotive Association, its market share dropped to 13 per cent on sales of 35,727 units in the first half of 2016, compared with a 15.6 per cent and 50,205 units sold in the previous corresponding period.

This year, Proton is targeting to sell 100,000 cars this year, compared with 102,175 units in 2015, mainly of its flagship model Proton Saga.

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Reading Time: 2 minutes

Malaysian carmaker Proton, which is on the search for a potent foreign partner to revive its ailing business, this week shortlisted five potential foreign partners for a tie-up in the form of a minority stake acquisition.

Reading Time: 2 minutes

proton-logoMalaysian carmaker Proton, which is on the search for a potent foreign partner to revive its ailing business, this week shortlisted five potential foreign partners for a tie-up in the form of a minority stake acquisition.

While Proton did not disclose the names of the companies, it is understood that Suzuki, Volkswagen’s Skoda unit, Peugeot-Citroen and Renault are among them, as well as one of the company’s current partners, Mitsubishi, Honda and China’s Youngman.

In any case, Proton will remain a Malaysian company with investment holding DRB-Hicom remaining its substantial shareholder. The deal should be closed by the first quarter of next year.

DRB-Hicom, which is involved in the auto, banking, services and property sectors, took over Proton from the Malaysian government in 2012, but failed to resuscitate the carmaker. The government had to give Proton a $312 million loan earlier this year on condition that it seeks a strategic partner.

Proton was established in 1983 as Malaysia’s first national car brand, although is largely used Mitsubishi’s technology at that time, while it later developed its own cars. Sales peaked in the early- to -mid-1990 when Proton reached a domestic market share of two-thirds.

However, after the Asian financial crisis, Proton’s fortunes dwindled, with its market share falling continuously due to quality issues and stronger competition in the low-price car segment. According to statistics by the Malaysian Automotive Association, its market share dropped to 13 per cent on sales of 35,727 units in the first half of 2016, compared with a 15.6 per cent and 50,205 units sold in the previous corresponding period.

This year, Proton is targeting to sell 100,000 cars this year, compared with 102,175 units in 2015, mainly of its flagship model Proton Saga.

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