Proton and the Malaysian Automotive Institute (MAI) today signed a memorandum of understanding (MoU) to further optimise shared resources to be used in developing Proton’s parts and components suppliers to ensure the vendors meet global standards.

The MoU signifies a collaboration between the government (represented by MAI) and the private sector (Proton) in enhancing the competitiveness of the national carmaker’s value chain. It will pool resources to maximise the utilisation of existing automotive development infrastructure – particularly in the areas of advanced design applications, digital process simulation and improved validation technology.

“Upstream automotive activities – the design thinking, engineering applications and validation technology – are key towards any meaningful participation within the automotive industry, especially as we are moving fast towards the fourth industrial revolution,” said MAI CEO Datuk Madani Sahari.

Thirty suppliers took the “Performance Excellence Pledge” today

“The MoU today has a significance beyond capacity building. It’s a new way forward towards a change of culture and mindset for the entire automotive value chain. Businesses must reinvent strategies to keep themselves competitive and relevant,” he added. The government has allocated RM4 million to this initiative, and Proton will match that figure, Madani revealed.

Besides the MoU signing, 30 local Proton suppliers and the carmaker today signed a “Performance Excellence Pledge”. Basically, the vendors pledged to deliver goods in a timely manner, and at the right cost, while upgrading their capabilities to global standards. On Proton’s part, it promised to collaborate and assist the suppliers – besides giving them business, of course.

The suppliers, which will provide parts for the Proton X70 SUV, will undergo a specific development programme for them to achieve Geely’s global standards, which will then enable them to export parts. From Proton’s perspective, the vendors need to level up. “The level of technology in our new products are higher, and the suppliers need to upgrade. To get into Geely’s group of suppliers, they must first upgrade,” said Proton deputy CEO Datuk Radzaif Mohamed.

In his address, Proton CEO Dr Li Chunrong highlighted capacity as the main hurdle for its vendors, and that there are bottlenecks in the supply chain. He promised assistance in the form of overseas experts at no cost to the suppliers. The Proton chief also urged suppliers to reinvest profits into improving technical capabilities.

While he emphasised on quality, it should not just show in the products. “Quality is life, quality is work culture and work ethic,” he said, adding that quality must be balanced with cost to ensure sustainability.

“We are family, we (supply chain) are all together. If not, we can’t compete with other OEMs,” he said, explaining that Proton is not competing against other brands one-on-one, but as part of a group (Geely) against other automotive alliances.