Last month, Proton and Suzuki signed a Memorandum of Understanding (MoU) and Licence Agremeent (LA) that, amongst other things, gives the national carmaker access to Suzuki’s models, platforms, powertrain and automotive technology, with the Japanese company providing technical assistance for the products and scope selected.
The LA grants Proton the rights to CKD manufacture and sell a Suzuki model under its own brand, and numerous mentions of “small, compact cars” and smaller engine segment vehicles” fuels speculation that Proton wants to develop its first A-segment city car to challenge Perodua’s hot-selling Axia.
In a StarBizWeek interview with Proton chairman Tun Dr Mahathir Mohamad and Proton CEO Datuk Abdul Harith Abdullah published over the weekend, it was pointed out that Proton is seeking to manufacture between 60,000 and 100,000 Suzuki cars for both the local market and exports.
This, it was pointed out, will help fill Proton’s excess capacity. Both its Shah Alam and Tanjung Malim (pic below) plants have a combined capacity of 370,000 units. The company produced around 120k cars last year.
“We need to fill that up otherwise cost will become very high. Filling up our current capacity in the next three to five years is a must. The total number people directly related to Proton is 77,000. We have to do everything within our ability to be successful,” Harith said.
For those questioning the size of Proton’s latest partner, Harith has this to say. “Suzuki is not small. They produce three million cars a year and have been number three in Japan for seven consecutive years, after Toyota and Honda. They have chosen a different path, going into developing countries instead of developed countries. They are big in India, producing 1.2 million cars and 800,000 cars in Japan.
“To be successful, you must have a high level of cost effectiveness and this is what we want to learn. This is part of the journey for Proton to decide where it wants to be,” he said.
His chairman elaborated on the choice of Suzuki as partner. “We need technology partners which are suitable for us. We don’t want technology partners who may practically take over the company. This is a very Malaysian company,” Tun Mahathir stressed.
“I think Suzuki will be providing certain technologies that Proton does not have now. We need to have some expertise with regards to smaller cars. We are not thinking just about the Malaysian market or competing with Perodua. We want to produce Malaysian cars which can be exported.
“It will not be a pure Suzuki car. Components or parts may come from Suzuki, but we will build and design our own car which will be sold in Malaysia and also foreign markets. So, we are not directly competing with Perodua,” he added.
Proton-Suzuki vs Perodua-Daihatsu sounds like a proxy war between two compact car experts, and Proton will need to claw back some ground from P2, which has plenty of momentum from the Axia and Myvi facelift, but Harith is adopting a non-confrontational tone. He says that just having the same 30% market share as Perodua is good enough. “Put pride aside, that can come later,” he said.
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AI-generated Summary ✨
Comments express skepticism about Proton's collaboration with Suzuki, citing concerns that rebadging Suzuki cars might cannibalize Proton’s existing models like Iriz and Saga, and questioning the strategic direction of Proton’s management. Several commenters criticize Proton’s past reliance on rebadging, poor quality parts from cronies, and high car prices influenced by government protectionism, which have burdened Malaysians financially. There are references to Malaysia’s lost investments and jobs due to Proton’s perceived inefficiencies and protection policies. Some suggest that Proton should focus on rebadging smaller Suzuki models, or shifting to assembling and co-developing cars with Suzuki for regional and global markets. Overall, sentiments lean toward disappointment, frustration, and calls for Proton’s closure or restructuring for the benefit of consumers.