Chinese automaker buys stake in Malaysia's Proton

I believe Geely has the ability and expertise to take Proton to new levels of success, " said Najib.

"Geely will also develop future models with Proton, bringing in the latest technology and research and development (R&D) programmes, and will be assembling Volvo cars if there is any excess capacity in the Tanjung Malim plant", he said at a press conference after the signing of the definitive agreement here today. We hope that through our cooperation with DRB-Hicom, Proton will be transformed into the number one independent automobile brand in Malaysia and one of the top three in southeast Asia.

"The government helped because we cared about welfare of those hundreds of thousands of people who had jobs within Proton", he said during the signing ceremony between Zhejiang Geely Holding Group (Geely) and DRB-Hicom. Geely, the Chinese owner of Sweden's Volvo Cars, will inject 170.3 million ringgit ($40 million) into Malaysia's Proton as part of its purchase of a stake in the automaker and is paying 51 million pounds ($65 million) for 51 percent of Proton-owned British sports vehicle maker Lotus, an executive of the Malaysian company said Friday.

Geely's Chairman Li Shufu also highlighted that his priority is to turn Proton and Lotus into a profitable entities.

The deal involves a cash injection by Geely worth RM170.3 million and a RM290 million on the implied value for the Geely Boyue model, which was earlier reported to be the first Proton SUV model from the collaboration.

Najib said the partnership would see Proton realise its potential to become a premier auto producer in South-East Asia. It bought Volvo from Ford Motor Co.in 2010. Last year, Proton sold only 72,000 units, giving it barely 12 percent share of the domestic market, he said.

"This is the beginning of a new era for Proton. we want to expand its footprint in the region", he added.

"Proton's status as Malaysia's national auto is secure, and DRB-Hicom remains a majority shareholder". The government will also supply the carmaker with the remaining 250 million ringgit of a 1.5 billion ringgit soft loan extended past year.

With these strategic partnership, Najib said, it could pave the way for Proton to become one of the leading carmakers in South-East Asia and one of Malaysia's great exports to the region.

In addition to Geely, several others companies expressed interest, include French carmaker Peugeot maker PSA and Japan's Suzuki Motor Corp.

  • Salvatore Jensen