Business

Friday December 5, 2008

Proton in product collaboration with Mitsubishi

By JAGDEV SINGH SIDHU and DANNY YAP


KUALA LUMPUR: Proton Holdings Bhd and Mitsubishi Motors Corp have agreed on a product collaboration that would see Proton source a vehicle from Japan to replace the Waja and Mitsubishi take the Persona and Proton’s upcoming MPV (multi purpose vehicle) to be marketed as Mitsubishis in certain markets.

The agreement would also see Proton and Mitsubishi Motors jointly develop a small hatchback car that is slated to be introduced after 2010.

The deal with Mitsubishi, which would have met the internal wishlist of Proton, departs from the strategic partner through equity shareholding route many had expected Proton to take as it tries to find its footing in a globally more competitive business.

The methods of a product collaboration were spoken in some detail by Proton managing director Datuk Syed Zainal Abidin Syed Mohd Tahir in a recent interview with Bizweek when he said some of the world’s biggest names were knocking on its doors to form a strategic collaboration.

“Today we are sitting on an opportunity and we need to act fast. The time is right for us to look (for a strategic partner). The current global crisis gives us an opportunity and going forward, we need to have better economies of scale.”

Mitsubishi Motors president Osamu Masuko said talks were ongoing and positive.

“We have a good long and healthy business relationship with Proton over the years and welcome any ideas,” he told StarBiz in an interview yesterday.

However, Masuko said any announcement of new developments in terms of a collaboration between the two parties should come from Proton, adding that Mitsubishi did not expect an equity stake in any collaboration.

“We are already business partners of Proton as we still supply some auto parts for the company,” he said,

The agreement between Proton and Mitsubishi Motors marks a return to closer ties between both parties.

The original Proton Saga was based on a Mitisubishi Lancer and other Proton models that were based on Mitsubishi platforms included the Wira and the Perdana.

But both companies had a falling out and shareholding ties ended after the Japanese manufacturer sold its stake to Khazanah Nasional Bhd.

Apart from a rebadging exercise, both companies are also earmarked to produce a small hatchback car.

Syed Zainal said there was a strong pull among global car makers to produce a small car or an “A-class segment car.”

“By ‘small car’, I mean a small hatchback, one with space and that offers fuel economy. It’s in demand now,’’ he said, adding that it would likely be done through a joint venture.

“It must be a joint development and I can assure you there is no lack of interest,’’ he said.

Apart from having a low-cost production base for a small car, the tie-up with Mitsubishi Motors could allow Proton to get its hands on an engine from Mitsubishi Motors that would power the planned hatchback.

The joint collaboration on the hatchback would mean shared costs and a division of marketing rights on future sales of the car.


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