Proton plans MPV, SUV to boost sales

KUALA LUMPUR: Proton Holdings Bhd would introduce the much-sought-after MPV (multi purpose vehicle) and SUV (sports utility vehicle) in 18 to 24 months to boost local and foreign sales.

Whether the MPV and SUV would be developed via a foreign collaboration is not known. Proton is keen to fill the gap in its product line up in the fast growing MPVs and SUVs segments since it plans to target high growth markets such as China, India and Asean to boost exports.

This is necessary since domestic sales have eroded with the lowering of tariffs on foreign cars under the Asian Free Trade Area, making the price of foreign cars more attractive to car buyers.

Proton’s market share has dropped to 41% from 61% in 2002.

But the car company is unwilling to surrender control of Proton at any cost to obtain technology from its partners, even though it believes that building strategic alliances is the way forward.

“We are facing restrictions on our competitiveness and are seeking strategic alliances but we are not prepared to give up our values,” Proton manufacturing director Datuk Kamarulzaman Darus said.

“One must not be controlled to get technology and economies of scale,” he said in his speech at the KL Automotive Conference 2006 in Kuala Lumpur yesterday.

Proton had, early this year, ditched Germany’s Volkswagen AG as a possible equity partner, as the national carmaker did not want to give up management control of Proton.

Turning to the SUV and MPV, Kamarulzaman said the development had begun. By that, he means Proton is assessing the market, product demand and talking to various parties.

He declined to elaborate, but merely said: “I can assure you we are developing the product and in the normal course of business, the market certainly would like the product as soon as possible. We are thinking of 24 months, if not less.”

Asked if the SUV would be developed by Proton or in cooperation with other parties, Kamarulzaman said: “Not only the SUV, (but also) the MPV and all the other products. We intend to develop them ourselves with the support from our strategic partner, Lotus.”

He declined to comment if the SUV and MPV would be developed jointly with Proton's new partners from China.

On Tuesday, Proton entered into an understanding with parties in China to undertake feasibility studies with regard to evaluating opportunities and possibilities in providing assembly services and the distribution of vehicles of Proton and Chery brands in China, Malaysia and Asean.

The agreement was signed with China’s Chery Automobile Co and Malaysia’s Alado Corp Sdn Bhd.

Proton's unit Lotus Engineering (M) Sdn Bhd also entered into an understanding with Jinhua Youngman Automobile Group Co to undertake a joint feasibility study on designing, developing and selling completely knocked down vehicles in China.

Kamaruzaman said the companies had up to Aug 28 to complete the studies.

Asked if Proton’s Tanjung Malim plant would be used to assemble some cars for Alado and Chery, he said: “We have to look at the real value and the value-added benefits.”

He also said that China, India and Asean remained the key markets for Proton to expand its exports.

“There is no point in entering every country. We must have an integrated offering and our approach should be about sustainability,” he added.

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