While the current Proton-Suzuki partnership is only involved in the distribution of the former’s products and the rebadging of the latter’s, it could eventually expand into a deeper research and development collaboration, according to The Sun.
The English language daily quoted an industry observer, who said the Japanese carmaker would be a “natural fit” for Proton, as the existing tie-up concerns the assembly and sale of an entry-level A-segment vehicle for the Malaysian market.
Last June, the two companies signed a memorandum of understanding (MoU) and licence agreement to form a long-term strategic collaboration and partnership. While the deal would initially only enable Proton to sell rebadged Suzukis, it did allow both companies to explore the possibility of jointly developing new models.
This revelation follows the confirmation last Friday that the national carmaker had secured a RM1.5 billion soft loan from the government. The deal came with several strings attached, including the requirement to rope in a notable foreign partner to improve Proton’s R&D capabilities.
Malaysian Automotive Institute (MAI) CEO Mohamad Madani Sahari said that the foreign partner should not only collaborate with Proton in research and development, but also assist it in expanding its market, particularly overseas.
“Discussions between Proton and Suzuki have started and details have yet to be concluded. Therefore, I think we should give both parties time to deliberate,” he said, adding that the extent of the partnership should be thoroughly discussed with a clear outcome to make Proton’s business plan viable and sustainable.
Madani also said that the future of Proton’s ecosystem of its hundreds of vendors, dealers and supporting industries needs to be secured. “There are some 60,000 people who are directly dependent on Proton and about 130,000 more who are indirectly involved. This is just too big to fail.”
Echoing his statement, Hong Leong Investment Bank Research analyst Daniel Wong said that the partnership could just work in Proton’s favour. According to him, a technology partnership like this would open up an opportunity to leverage on new technologies and develop products for specific market niches.
“Going forward, in return for sharing its technology capabilities with Proton, Suzuki can use Proton’s platform to grow its presence in Southeast Asia,” Wong said.
The publication gives the example of Suzuki’s partnership with India’s Maruti, which first existed as a licence and joint venture agreement in 1982. It added like Maruti, like Proton, was also facing problems with public perception, but has now entered a more premium segment through its Nexa dealerships, which sell the more expensive Baleno and S-Cross. Suzuki now owns just over 56% of Maruti Suzuki India.
Taking the opposite stance was AmInvestment Bank, which expressed doubts of the government grant being adequate to stem Proton’s losses amid falling sales. The research house held particular concern over the absence of a plan involving an incentivised equity strategic partnership with a foreign partner which will utilise Proton’s excess capacity.
“It has been reported that Proton’s Shah Alam and Tanjung Malim plants are only operating at 35% utilisation rates. Proton sales fell 12% year-over-year to a low of 102,175 units last year, and the outlook remains bleak amid stiff competition from Perodua and foreign brands,” said analyst Thomas Soon.
The company’s financial performance continued to be strained by thin margins and considerable financial commitments, including a RM268.5 million annual term loan payment that stemmed from the restructuring of debt obligations of its subsidiary, Group Lotus.
Meanwhile, another analyst said that the RM1.5 billion loan could only sustain Proton for two or three more years, considering that the company racked up over RM2.5 billion in accumulated losses in 2015.
Looking to sell your car? Sell it with Carro.
But first, sack the designer!
Nothing to do with the designer. That’s what u get when politicians are involved with business
No, it’s what you get when Bumiputeras protection policy are involved
Good times ahead Proton
Squandering R&D money from rakyat already bad enough, now have to share it with Japs….worst. Bangla had to send 2million bangla to work like slaves, in order to send home 2Billion. Japs only need to send a few emails and receive their share of 1.5 billion
Sharing is caring. Let us share our money with Proton
Proton 6S principles:
1. Sendiri Cakap
2. Sendiri Syok
3. Sentiasa Rosak
4. Selalu Sales
5. Siapapun tak nak
6. Suzuki kena kali ni
Allo, why need suzuki tech when you own Lotus….ahhhhh? Makes no sense. Just close London factory n move it here.
“This is just too big to fail”
Syukurlah ada BN
nothing is ever too big to fail…
just the bigger they are, the harder they fall…
OMG…P1, pls close shop lah…
u must be dreaming to think that new vehicle will be much cheaper if proton closes shop
May become? a not well positioned japan brand and Proton? it will not work. they are trying to met Gov conditions for their soft loan. I bet after few month Suzuki will also eject like Honda and Mitsubishi..
Belajar mendengar. Dengar apa yg pengguna hendak, dan bkn pengguna yg dipaksa untuk percaya produk proton adalah baik. Kalau benda yg mudah ni pun x boleh buat, baik x payah berniaga.
Be patriotic, buy Proton
in b4 suzuki dah makan dedak
India ada Maruti Suzuki
Malaysian Proton Suzuki in the making….
Replace Iris with Swift.
OMG…why not use Swift transmission in Iriz, so sure can sell well.
Don’t don’t chunk time.
For long-term survival, not only Proton needs to improve its local market share, Proton needs to export more.
May, Maybe, Going to be, OR Soon to be… ALL Proton news are “empty promises” for the last 30 years keep doing the same statement over and over again… Global la, Game changer la, (latest)Turnaround la, WHAT else next???
“There are some 60,000 people who are directly dependent on Proton and about 130,000 more who are indirectly involved. This is just too big to fail.” said Madani.
So millions of Rakyat continue suffer because of this “130,000 more”. No wonder AP owners never fall to become “Super Rich”… Thanks tongkat BN for using Tax Payers Money for them !!!
What type of suffering do you mean?
In Thailand, Indonesia and Singapore, they got no Proton.
But the car prices arent much different from Malaysia.
Even if the car prices are damn high in Malaysia, i dont think those capitalists industry players will bring the car prices downward…
Since when SG car price cheaper than MY???
Ratio of Rakyat salary compared to daily life expenses(including debts and loans).
This I agree. Malaysians are used to paying upwards of a 100K for a half decent car. The car players know this and will keep selling us expensive cars.
they will never sacrifice their margins. It’ll keep getting bigger and bigger.
The only thing we can do – Hold off buying cars.
Buy used or squeeze them for a pre-reg, demo, etc. Don’t buy new.
Agree brader!! I still hold out my old car.
Cash is power!! Rakyat have the power!!!
“Suzuki now owns just over 56% of Maruti Suzuki India.”
It’s time to ‘jatuh maruah’. Jangan pegang sampai mati.
Yes, can’t wait for new Proton Swift Sport with Lotus Rides & Handling to smoke Beroktua Myweak!!
No doubt it is a good move for national car company looking into current situation.
Wait for boring Samy to come here to give fake political copy and paste comment. See what Samy going to comment?
Suzuki and Proton partnership could be an interesting thing to watch.
Suzuki has a vast experience in small car segments with a strong foothold in India. The number of ownership in Suzuki Maruti is just a number, given the cabotage policy in India.
Proton has a good line ups to offer, complementing the Suzukis.
On paper, things may work.
Get rid of the UMNOputra, give more attention to Quality department and after sales services, Proton should be able to compete.
So means the current Prodon R&D department is incompetent and useless? If so, why they still in the job despite billions invested every year but came out wit epic failures like the Supina Iris Preve..the designers design ugly cars and the management approved cars tat nobody wants
Its all about vendors greed and lusts toward money.
Give way for vendors who believe that profit comes from sales volume, not profit margins.
20% profit X 10000 cars.
Not 100% profit X 100 cars.
Losers form a good partner. One rejected by Tata and VV, the other rejected the people in its home country. Bagus bagus
“Loan” from govt?
1.5bil public money gone down the drain
Take loan from banks la
No, should take loan from Proton supporters
Kill that old saga,satria neo,old persona,inspira fast! Too much liabilities drags the movement of p1.Concentrate on new saga,persona,accordana.The same time fit in new engine into preve,exora & suprima.Exora deserve a bigger mill than 1.6 tho.Do a facelift with more quality materials on it too.Quality,proton! Shoot out those bloody pundek vendors.Make people happy,not vendors!
luckily i didn’t buy Suzuki…
Ditch CamPro 1.6L and use M16A = best R&D ever from Proton.
Ditch Punch CVT and use Jatco CVT = 2nd best R&D ever from Proton.
Ditch the design department and ask Korean help = 3rd best R&D ever from Proton.