Shah Alam: Proton Holdings Bhd and Japan’s Mitsubishi Motors Corp (MMC) have signed a memorandum of understanding (MoU) on the development of new vehicles for the domestic market, with the first expected within a year.
The two companies' new partnership marks the beginning of a series of tie-ups that Proton is seeking with global motor firms to position itself for the post-Afta arena.
“In our minds, we have decided that the way forward for Proton is to go for strategic alliances. This is one step to strengthen our product (range), (increase our) production efficiency and expand markets beyond Malaysia,’’ Proton managing director Syed Zainal Abidin Mohd Tahir told a press conference after the signing of the MoU yesterday.
“With this (MoU), Proton can quickly diversify its compact and saloon vehicle range as well as fill in the missing gaps in its product line-up,” he said.
Proton has not introduced any new models since June last year but Zainal said one make would be launched fairly soon. Asked if Proton would enter the MPV market with Mitsubishi's product range, he said it “could be possible but we have not finalised details’’.
He said Proton would look to strategic tie-ups to expand its product line-up and enter new segments but it was mindful that any partner should not compete in the same market.
Under the accord, Mitsubishi and Proton would explore co-operating in four areas – development of new Proton vehicles; mutual supply of components; technical support for production, engineering and quality control from Mitsubishi to Proton and the latter's vendors; and optimisation of Proton’s manufacturing facilities.
“The areas of collaboration have been identified and the taskforce has been mobilised. We are finalising the details,” he said, adding that the timeframe for reaching a formal agreement was six months.
At the signing, Zainal represented Proton while Mitsubishi was represented by president Osamu Masuko. International Trade and Industry Minister Datuk Seri Rafidah Aziz and Proton chairman Datuk Mohammed Azlan Hashim witnessed the event.
Zainal said Proton was eager to sell more cars and expand its range, “but the actual models out of the collaboration with MMC (Mitsubishi) are not going to happen immediately. It is going to take some time and it is not this year.’’
He also hopes the new agreement would lead to a better two-way collaboration unlike their previous accord.
Said Masuko: “In the past, we were a supporter of Proton but now we are equal partners. The collaboration will be different as Proton already has the capability to develop some parts and components.”
Masuko was a Proton director when Mitsubishi held a stake in the national carmaker.
Zainal said Proton might produce vehicles for the Japanese firm and hoped to share any joint platform for the domestic as well as export markets.
Asked whether the agreement would lead to another re-badged Mitsubishi sold as a Proton, Zainal said it was too early to say, because the finer points had not been deliberated.
Masuko added that Mitsubishi would provide current models to Proton and not those that were three or four generations old.
Asked if the tie-up would eventually lead to the Japanese company taking a stake in Proton, Zainal said: “We will discuss it when there are opportunities for mutual benefits.’’
Mitsubishi and Proton had a 20-year relationship but parted company two years ago. Mitsubishi had nonetheless continued to supply components such engine and transmissions for the Iswara, Wira, Satria, Arena and Perdana.
Loss-making Mitsubishi is the only Japanese vehicle maker that has yet to set up plants in Asean unlike its rivals at home. DaimlerChrysler AG is a former 13% shareholder of Mitsubishi.
Zainal has said Proton was keen to enter India and China but was likely to do so via partnerships.
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Mitsubishi Motors and Proton signed memorandum on new cooperation agreement
Kuala Lumpur, February 3, 2006 — Mitsubishi Motors Corporation (MMC) and Malaysia's major automobile manufacturer Proton Holdings Berhad (Proton) today signed a memorandum of understanding for wider areas of corporation between the two companies.
The formal signing was witnessed by Datuk Seri Rafidah Aziz, Malaysia's Minister of International Trade and Industry.
The agreement includes cooperation in the following areas:
· Product development of new Proton vehicles
· Supply of components between Proton and Mitsubishi
· Technical support for production engineering and quality control
· Optimization of Proton's manufacturing facilities
The agreement is expected to help MMC expand its business in Malaysia, above its current importing business of CBU vehicles from Japan.
Meanwhile, Proton will be able to diversify its vehicle range and accelerate the effort to achieve better quality and manufacturing process.
MMC currently supplies various levels of components, including engine and transmission, to Proton for vehicles such as the Iswara, Wira, Satria, Arena, and Perdana.
Proton's first car, the Proton Saga, introduced in 1985, was manufactured with intensive collaboration between Proton and MMC. MMC had sold its 7.9% equity in Proton on March 9, 2004, although it continues to supply component technology and parts to Proton.
The cooperation between MMC and Proton is expected to contribute positively to the development of Malaysia's automobile industry, under the terms of the Japan-Malaysia Economic Partnership Agreement signed by Japanese Prime Minister Junichiro Koizumi and Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi during the 9th Asean-Japan Summit last December.
Proton Holdings Berhad profile:
1. Head office: HICOM Industrial Estate, Batu 3, P.O.Box 7100 40918 Shah Alam, Selangor Darul Ehsan, Malaysia
2. Representative: Syed Zainal Abidin Syed Mohamed Tahir, Managing Director
3. Capitalization: MYR 549,213,002
4. Major shareholders: Khazanah Nasional Berhad, 38.32%
Petroliam Nasional Berhad, 7.85%
5. Business lines: Development, designing and manufacturing of automobiles
6. Highlights: Established in 1983 as a joint venture between Heavy Industries Corporation of Malaysia Bhd. (HICOM), Mitsubishi Motors Corporation and Mitsubishi Corporation to realize former Prime Minister Dato' Seri Dr Mahathir Mohamad's project to build a Malaysian car.
In 1985 Proton produced the Proton SAGA, the first Malaysian car, with all-round assistance from Mitsubishi Motors and Mitsubishi Corporation.
Launching the WAJA — the first Proton model to be largely designed and engineered in-house — in 2000 and the GEN-2 — powered by the first engine developed by the company itself — in 2004, the company continues to build up its engineering and technical capabilities and today enjoys wide-based support from the Malaysian population as a symbol of the country's on-going industrialization.