More on Proton’s search for a foreign strategic partner (FSP). Reuters reports that Zhejiang Geely is expected to bid – as early as this week – for a strategic partnership with the national carmaker, according to a couple of insiders with knowledge of the bidding process.
The sources told the news agency that the Chinese automaker has pitched to DRB-Hicom that it will offer Proton some of the latest vehicle technologies it has developed with Volvo’s input as part of the deal.
These include that used to design vehicles such as the automaker’s GC9 sedan and Boyue SUV, as well as small car tech developed with Volvo, the sources stated. They added that by offering Proton some of its own technologies, Geely is looking to break into right-hand-drive (RHD) markets, tapping it via Proton.
A significant partnership with Proton would give the Chinese firm entry into the global RHD market. “There are eight million RHD vehicles sold every year globally. Geely sells roughly zero RHD cars, so even if Geely cars were sold under Proton, if nothing else Geely would make a handsome license fee,” one of the sources explained to Reuters.
According to the source, the Chinese company’s investment would help Proton grow its exports and recover some of the global presence it has lost in recent years. “The overall plan is basically to invest in Proton to bring it back to global levels (of sales) it had in the 1990s,” the source added.
There was however no indication on whether Geely’s pitch – which the sources said was part of the final bidding round – included a cash offer for a stake in Proton. They added that Geely is looking for at least a 51% stake in the Malaysian carmaker.
When contacted by the news agency, DRB-Hicom stated it had nothing new to say. “We are evaluating the bids received. No disclosures until we have selected a FSP,” a spokesman said. Meanwhile, Geely declined to comment on the speculation.
Reports have placed Geely and France’s Groupe PSA as leading parties to become Proton’s partner. Last week, DRB-Hicom reiterated that it was presently focused on going through the critical process of identifying the ideal partner for the national carmaker.
It added that it would conclude and formally announce its partnership decision – which will also include the merger of the company’s plants in Tanjung Malim, Perak, and Shah Alam, Selangor – by the end of 1H2017, striving to complete the task as early as possible.
Earlier today, the government – which has stated that it will not intervene or be involved in the FSP decision, since the automaker was no longer state-owned – quashed rumours that Proton will sell 51% of its shares to a foreign partner.
Second international trade and industry minister Datuk Seri Ong Ka Chuan said a final decision has not been made. “The government is not relinquishing the country’s proprietary rights. We are looking at the opportunities to help Proton grow more efficiently, so that it will be on par with other big brands in the global car industry,” he explained.
Previously, the government had said that it had no issue with DRB-Hicom relinquishing its majority stake in Proton. Meanwhile, DRB-Hicom had earlier said that Proton would remain very much a national carmaker, and has repeatedly stated that it will maintain a significant equity in Proton.