Late last month, Proton partnered China’s Zhejiang Geely Holdings Group.
But what can we expect next from the tie up?
What sort of developments can we see for the next one year or so?
What models can Proton and Geely roll out?
Let us take a look.
It will be a tough road ahead for Proton
Proton has been registering a loss of RM1 billion in 2016 and is expected to make further losses of another RM1 billion in 2017.
Japan’s Nikkei Asian Review said on June 9 that despite Geely taking a lead, Proton would have a difficult route to travel as it was not a “power” brand.
Furthermore, sales has been slow in Malaysia and exports in Asean and other countries have also been slow.
So we can expect challenging times ahead for Proton.
Geely will improve and review dealerships
Nikkei Asian Review said in the next few months, Geely and Proton might review and improve dealerships in Malaysia and perhaps all over the world.
Proton might close certain dealers in Malaysia which are not profitable and open dealerships in more profitable areas.
Geely which owns Volvo might even open Proton dealerships in Europe.
This will be a great opportunity for Proton to pentrate the European market.
Proton Geely will soon launch the SUV
In a New Straits Times report on May 28, DRB-HICOM Berhad group managing director Datuk Seri Syed Faisal Albar said Proton and Geely might launch Proton’s first sports utility vehicle (SUV) which is a fast growing segment in Malaysia.
Proton might use the Geely SUV platform and the SUV will be assembled at Proton’s Tanjung Malim plant.
This will be a boost for Proton as the SUV segment is very popular right now and will be positive for Proton.
Geely will assemble all of its sedan in Tanjung Malim plant
In the next few months, Geely might also assemble all of its right hand drive cars at the Tanjung Malim plant from China.
This will be cheaper for Geely as it does not have to build a new plant in Asean and just use the Tanjung Malim plant.
Geely is targeting to penetrate the 600 million population in the Asean market to sell its cars in countries such as Indonesia, Thailand, Singapore and others.
Geely plans to sell 500,000 vehicles in Malaysia by 2020
As part of its plans to revive Proton, Geely plans to sell 500,000 vehicles in Malaysia as well as the export market by 2020.
This will be a good boost for Proton which exports only 30,000 vehicles a year.
Geely will use Malaysia as the platform to export its cars to Asean.
This will be good for the rakyat as by 2020, there will be 120,000 Malaysians working at Proton from 60,000 at the moment.
Proton market share could get better
Proton’s partnership with Geely could turn around Proton back into profitability.
If buyers like the new Proton Geely models, its market share which is at 12 percent in 2016 can improve and get better.
Proton’s sales performance which totalled 72,000 in 2016 could improve in 2017 and this will be a great piece of news for the rakyat.
DRB-HICOM will get better
Proton’s weak performance in the last two years has affected DRB-Hicom’s financial performance.
Proton’s poor sales has affected DRB-HICOM so bad that the company has made losses of RM1 billion for the automotive segment in the year ended March 2016.
With the Geely partnership, it is hoped that DRB-HICOM can turn around as is it a public listed company.
When it makes a profit, it will be able to help the rakyat through dividend payments.
Proton can penetrate the China market in the next few years
Just as much as Geely can penetrate the Asean market, Proton can also penetrate the China market which is one of the world’s largest automotive market.
China’s economy is the second largest in the world after the United States and growing at double digit growth.
It is the world’s most populated country with a population of over 1 billion people and this will augur well for all car companies in China which include Proton.
So the partnership with Geely has opened a lot of doors for Proton which includes China.
Proton can even penetrate Europe as Geely owns Volvo which was originally from Sweden.
The European market is tough but Proton can do it with Geely’s help.
The rakyat can look forward to cheaper Proton cars
The best outcome from the Proton Geely partnership is the possibility of cheaper cars.
Now that Geely is able to use Proton’s Tanjung Malim plant, it will be able to save cost.
This is because Geely does not have to build a new plant in Malaysia.
Geely will also be able to use local Proton Malaysian workers and not hire new workers.
This will again save cost for both Proton and Geely.
With the cost savings, the rakyat may one day see cheaper Proton or Geely cars.
This will greatly benefit the rakyat which is already burdened by the high cost of living.
The rakyat will then be able to save some money from paying high installments for their cars.
This savings can then be used to spend in the country which helps make our economy stronger.