Proton and Chinese auto company Hawtai Motor Group Ltd signed a Memorandum of Understanding today to explore collaboration in product development with the aim of expanding Proton’s presence in the Chinese market.

The MoU was signed by Proton Group MD Datuk Seri Haji Syed Zainal Abidin Syed Mohamed Tahir and the Executive President of Hawtai, Hou Haijing in Nanning, China, witnessed by the Prime Minister Datuk Seri Najib Tun Razak and Minister of International Trade and Industry, Datuk Mustapha Mohamed.

Under the MoU, Proton and Hawtai will evaluate the possible establishment of a Joint Venture Company (JV Co.) in China, to invest in joint new product development including joint design and development cost sharing. Both companies will spend the next three months finalising their study of the business case.

Proton says Hawtai are looking at manufacturing the Proton Exora MPV as well as the upcoming Proton P3-21A sedan in China, which by the way is set to debut in early 2012. The two companies will explore the development of new models together in later phase.

The joint venture company will also be responsible for vendor sourcing and component development work with local Chinese vendors. This will hopefully allow Proton to tap into low cost vendors in China and explore the potential of cross-supplying components from local Malaysian vendors to China and vice-versa.

Beijing-based Hawtai currently has the capacity to make about 200,000 vehicles, 300,000 engines and 300,000 automatic transmissions a year. Hawtai also has a joint venture with South Korea’s Hyundai Motors to manufacture the Chinese-market versions of the Hyundai Matrix, Hyundai Santa Fe and Hyundai Terracan.