Earlier today, DRB-Hicom announced that it had reached an agreement with Zhejiang Geely for the Chinese carmaker to acquire a 49.9% equity stake in Proton.
Both parties expect to sign the definitive agreement for the deal – which is subject to regulatory and shareholder approval – before the end of July 2017. The deal will also see Geely acquire a 51% majority stake in Lotus as part of DRB-Hicom’s full sale of the British sports car maker.
Questions about Volvo production were also raised during the media briefing following the announcement ceremony today. Currently, local assembly of Volvo cars are being carried out by Volvo Car Manufacturing Malaysia via its Swedish Motor Assemblies plant in Shah Alam, and it was asked whether the Proton-Geely deal will bring about change in local assembly operations, since Geely owns Volvo Cars. It acquired the Swedish automaker from Ford in 2010.
In response to that, DRB-Hicom did not disclose whether there would be any changes, saying that details, if any, will be revealed following the signing of the definitive agreement. Group MD Datuk Sri Syed Faisal Alba did hint that since Geely is looking to grow the Volvo market in Malaysia, there is a probability that it will use Proton to assemble Volvos and pay an assembly fee.
At present, Volvo’s local assembly operations has an output of 1,500 units, but the company said earlier this year that a RM20 million restructuring of its Shah Alam plant will allow it to eventually raise total production up to 5,000 cars a year. It is set to increase capacity by 50% this year, followed by another 50% next year.
Though it wasn’t mentioned, there is also the possibility of the Chinese company utilising Proton’s Tanjung Malim plant as a base to build right-hand drive versions of its Lynk & Co 01 SUV, as reported back in March. It is said that Geely is eyeing at exporting the offering from its new sub-brand to various markets like the UK and Australia.
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Volvo, Lotus, Lynk & Co assembly in Tanjung Malim.
Geely, you sure you can accept proton standard of assembling cars? Buyer beware.
Fully robotic so no problem
I dont think assembly is proton problem. The problem known till now is the part quality which is quite poor for certain part.
Many buy Honda to feel more atas than Proton, only to find panel gap, rattling plastic like a proton.
Go honda sc, kena upcar with “memang machiem ini punya” servis, topkek.
But honda is same same Volvo at half price. So still acceptables.
Now Proton will have Geely tech which is from Volvo tech.
Volvo is the true atas brand, Honda lauya quality, better buy future Geely-rebadged Proton instead.
Proton > all
NoNOno. – Please bring and manufacture your Lotus car here instead with 0 Tax. Thanks
With such excess capacity, can contract assembly for GM, Ford, Fiat, Mitsubishi, Suzuki etc
Volvo cars have serious amount of power, sometimes, even more than the Germans. Obviously Japanese still haven’t caught up with turbo charging yet, and of the lot, Toyota is the worst, with outdated and underpowered engines which explain its declining sale of Toyota passenger cars in Malaysia.
Like Nokia loh… Toyota play safe and remain the same… after a while… everyone overtook. Then they wonder what did they do wrong? Volvo on the other hand didn’t know what did they did right. Overpower cars… hahaha.
Dream on la Proton! SUV Have no market in Malaysia right? Do you remember dr M said about SUV?!
No wonder ur Toyota kena upcar by Honda.
Good job, continue to become UMW Toyota’s product planner. One less rival to bother.
Hrv,crv, chr… All suv. You go back and sell durian. Have market.
It won’t happen. Cause they already have a Shah alam plant.
SMA baru upgrade Shah Alam plant.
But who knows, with XC60 and XC40 looks to be the game changer, they may need additional capacity in Tanjung Malim.
Otherwise, can presume assembling Volvo in TM plant is lower priority.
Maybe its for export market, who knows. They need to build a lot to get economies of scale. So to build only for Malaysia does not make much sense.
As is, 40% of units assembled at SMA is exported to Thailand.
They’re upgrading it now to meet future demand, though who knows, XC60 and XC40 are set become really hot sellers beyond their projection, only then I see TM plant’s role to kick in.
Malaysia has been Volvo’s ASEAN export hub for decades now, so I don’t see why such an agreement couldn’t work out. It’s just that Volvo doesn’t really need the capacity in the short term, since the VCM Shah Alam plant can easily handle the current domestic demand. But if Volvo / Geely wants to make Malaysia their worldwide RHD hub… then yes, they will need a bigger, more modern plant with high automation… i.e. Proton’s Tg. Malim plant.
As for Lynk & Co, it will be up to Geely on whether they wish to choose Proton Tg. Malim as their worldwide RHD hub. Personally, I think it’s very reassuring to hear that Geely is offering to build their Lynk & Co SUV here, but I still think it’s important to take all this news with a pinch of salt. Promises are good and all, but it is one’s actions that truly matter at the end of the day.
Volvo used to have Thai assembly plant, until they shifted & centralized their production to Shah Alam for ASEAN markets (sometime in 2008/2009) , and for certain models only of course.
Not sure about the brand reception of Lynk & Co (sounds poyo to me). Better off with Volvo..
There is a lot of work and intel they need to gather to decide how best to maximise the Tg Malim plant.
Making it RHD hub is logical on paper, work still needs to be carried out to confirm its feasibility.