It’s been a while since we’ve read of any real concrete news on the Proton-Volkswagen deal, but Proton has not been sitting on their asses waiting for something to happen. From what I’ve been told, new product development continues as usual, and there has been some significant milestones happening in the past few weeks with Proton that we can be proud of.
For one, the recent Chinese Europestar GEN2 rebadge deal is set to bring in billions of ringgit in revenue for Proton, with RM937 million in revenue and RM102 million in royalties set to be generated in the next 20 months with the 30,000 GEN2 CBU units.
The sweetest part of the Chinese deal would be the licensing deal to supply the Campro engine platform in CKD form to Youngman Automobile Group for local assembly in China. The deal is expected to rack up 150,000 units over the next 6 years, and considering royalty payments for parts localisation in China as well as importing parts straight from Malaysia – the deal is expected to be worth a few billion ringgit.
This means better economies of scale for both Proton and it’s vendors, something that Proton and basically any car manufacturer really really needs.
Money is also generated through Lotus Engineering, which will be providing design and engineering consultancy to Youngman for their other new Europestar cars that will be based on the GEN2 platform and Campro engine. This is expected to come up to RM195 million.
Proton managing director Datuk Syed Zainal Abidin says this is much like what Mitsubishi did for Proton when Proton first started out. Now Proton is playing the role of Mitsubishi to Youngman’s Europestar.
Efforts are also in place to expand Proton’s Indonesian dealer network. Proton expects to have 10 dealers in the country by the end of the 2008 financial year and sell 4,700 cars in Indonesia by the end of the 2008 financial year. Proton has also had an order for 5,000 Proton Waja taxis in Iran – something that would likely throw American company GM out of the question when it comes to a partner.
With this new Europestar deal, more export deals in progress, as well as the impending upcoming Proton New Sedan due to be launched on the 15th of August 2007, Proton believes the worst is now over, and is expected to return to profit by the end of the current financial year – March 21st 2008.