Proton powers back to life after Geely stake acquisition

New models increased sales at Malaysian auto manufacturer

Proton, once a lackluster Malaysian auto brand, has shown signs of revival within two years of Chinese conglomerate Zhejiang Geely Holding Group's acquisition of a 49.9 percent stake from its parent company DRB-Hicom.

Its sales totaled 18,500 in the first quarter this year, up over 43.5 percent from the same period last year, with the X70, unveiled late last year, the best-selling SUV for three months in a row, CEO Li Chunrong said on Friday.

The X70, built based on Geely's popular Boyue SUV, was the first model the two co-developed since their partnership in late 2017.

Li said the model has refreshed the public image of Proton and boosted its market share to 12.7 percent in the first quarter, up 3.2 percentage points year-on-year.

Another two updated Proton models were launched earlier this month, helping to further boost the confidence of the carmaker and its 175 dealerships.

"Now at least 85 percent of our dealers are in profit," said Li.

Daniel Donghui Li, chief financial officer of Geely and a board member at Proton, said one reason that Proton chose Geely from three rounds of global bidding was that the Chinese carmaker had a unique vision for Proton's future development.

"We set a goal to help it to become the No 1 brand in Malaysia and a top three brand in the ASEAN region. The results so far are showing that we are on the right path," he said.

By 2027 Proton will have annual sales of 400,000 to 500,000 vehicles, which will account for 8 to 10 percent of Geely's total sales, he added.

A number of models are planned for Proton, according to the company, ranging from compact SUVs to sedans, MPVs and crossovers, with Proton and Geely engineers deeply involved in development.

Besides introducing new models, Geely has been helping Proton to strengthen its management and improve its quality standards. Geely has introduced its suppliers into Malaysia to boost the quality of local supply chains.

So far more than 20 suppliers have a presence in Malaysia, most of which have established joint ventures or reached technological cooperation with local companies, according to Geely.

As Proton makes rapid progress in Malaysia, it is soon to build its first overseas assembly plant in Pakistan with local partner Al-Haj. The two exchanged licensing and technical agreement documents in Beijing on Friday.

The plant, located in Karachi, has an initial investment of $30 million with its first model produced to be the Saga. Proton said the plant's annual production capacity is expected to reach 25,000 vehicles in four years.

Pakistan is one of the most populous countries in Asia and has an automotive market of 2.5 million vehicles a year.

Also on Friday, Proton inked a deal with China Construction Bank for a 3.1 billion loan that is expected to further its research and development and improve its manufacturing facilities. "Expansion to more foreign markets is critical for sales growth while obtaining financing allows the company to invest in the many projects required to turn Proton into a truly global automotive brand," said Sri Syed Faisal, managing director of DRB-Hicom and chairman of Proton.