To lower design and production cost, some manufacturer will cooperate between other manufacturer and share their model as well. Proton is taking the same approach by considering to rebadge small cars from a foreign partner.Read the full news from Bernama below.
PROTON CONSIDERING TO RE-BADGE SMALL CAR
KUALA LUMPUR, — Proton Holdings Bhd may consider re-badging its small cars sold in developing markets if a strategic partnership with a foreign partner materialises, according to MIDF Research.
This is on assumption that the national carmaker will provide a lower cost option to the strategic partner to enter such markets, it said in a research note Tuesday.
“This would be lucrative for Proton,” said the research house.
Besides reports that Proton was in discussions with foreign carmakers Renault and Volkswagen AG to form strategic partnerships, the company was also in the news with talks of a new controlling shareholder to replace Khazanah Nasional as well as a management buyout.
MIDF Research said a strategic partnership is not likely to involve any equity sale in Proton as the strategic partner is expected to capitalise on Proton’s assembly facilities for its completely knocked down (CKD) assembly and spare part operations.
“Things are looking up for Proton with its financials on the right track for a recovery and a strategic collaboration would help absorb the excess capacity at the Tanjung Malim plant, which is running at only 150,000 units per annum compared with its designed capacity of one million units per annum,” it said.
Moreover, Proton could make a tidy profit from contract manufacturing as well as commissions from sales, MIDF Research said.
“A collaboration would be attractive to the strategic partner as Proton already has a modern manufacturing facility, as opposed to a costly greenfield project,” it said.
As at midday today, Proton’s shares rose 14 sen to RM3.85 from RM3.71 yesterday.
proton holdings rebadge re-badging national carmaker volkswagen renault completely knock down ckd proton spare part proton volkswagen proton renault proton paertnership