Malaysian auto hub in pipeline after Geely revives Proton brand

Chinese carmaker Geely Holding Group and Malaysian conglomerate DRB-Hicom are revving up efforts to build a high-tech automotive park that will make the Southeast Asian nation a regional power in the era of smart new energy vehicles.

The project is built on the two companies' cooperation in reviving Proton. Geely acquired a 49.9 percent stake in the brand in 2017 from DRB-Hicom, which holds a 50.1 percent stake.

The 16-square-kilometer Automotive High-Tech Valley in Tanjung Malim, in the state of Perak, is positioned as a highland for NEVs and other new technologies in the ASEAN region.

It is expected to become a landmark project of economic cooperation between China and Malaysia, which are celebrating the 50th anniversary of diplomatic relations this year.

When completed, the valley will include R&D, production and testing of both complete vehicles and auto parts.

Among other things, it will have an annual production capacity of 500,000 vehicles by 2035, of which 50 percent will be exported, said Wei Mei, senior vice-president of Geely Holding Group and CEO of Geely International Holdings (Malaysia), last week.

It will produce vehicles bearing the Proton marque as well as Geely's brands. Other international companies can outsource their production to the valley as well.

The two will attract suppliers to the valley, which combined are expected to produce parts for 1 million vehicles by 2035, half of which will be shipped overseas.

With the cost of the automotive supply chain around 30 percent cheaper in China, the plan appears expensive in the short term, said Wei. But building up a local presence of global suppliers will pay off in the long run by gradually building up the country's competitive edge in the sector, she said.

In addition, Geely is introducing automotive engineering education into the Southeast Asian nation to train local students to meet the needs of the fast-changing sector in the country.

In an interview with CCTV last week, Malaysian Prime Minister Anwar Ibrahim praised the cooperation between his country and China in sectors including green energy and automobiles.

He said he has talked to local authorities in the state of Perak, asking them to take any measure they can to speed up the progress of the Automotive Hi-tech Valley.

The confidence of Geely and DRB-Hicom in the valley's prospects is based on their concerted efforts and success in reviving the Proton marque.

Within two years of their cooperation, the longtime loss-making brand became profitable in 2019, thanks to Geely's introduction of products, technology and management into Malaysia.

In 2023, Proton sold 154,000 vehicles, up from 64,744 units in 2018. With a market share of 19.4 percent last year, Proton has been the second best-selling carmaker in the country for five years in a row.

CEO Li Chunrong said Proton will launch an NEV brand later this year. Appointed by Geely to head the brand since 2017, Li said Geely and Proton have become more integrated through mutual respect and adaptation. He said he spends a lot of time on communicating with Proton employees, who he calls "my Malaysian brothers and sisters", and learning about them to ensure all work is done to Geely standards.

Koh Tang Kim, director of AAPICO Motors, a Proton dealer, said car buyers in the country are now more confident in the brand as Li's team has revamped the dealership network and raised their standards.

She said the introduction of Geely's latest models into Proton has bolstered the company's price range. Meanwhile, regular training as well as arranged exchanges with Geely dealers in China have broadened their horizons.

Eric Moo, CEO of Atiara Johan, another Proton dealer, said Geely's success in reviving the brand with DRB-Hicom has paved the way for other Chinese carmakers including Chery and Great Wall Motor to explore the Southeast Asian market.

Geely is continuing its effort to empower Proton. In April, Proton set up an R&D facility in China, which is expected to enhance collaboration with Geely and aid talent and knowledge acquisition.

"It is our goal to make Proton more popular and its user experience even better … So I have asked Geely to offer all possible support to ensure Proton's reform and long-term development," said Geely Chairman Li Shufu.