Proton Malaysia is now in first talk with the Renault and General Motors to be a technical partner in developing its upcoming new model which is the Proton perdana replacement model, Perdana Luxury Sedan. It is confirmed that the new perdana will be in our market soon. Proton will spend around RM500 million to make a new model. Read further news from bloomberg below.
PROTON NEEDS TECHNICAL PARTNER FOR DEVELOPING UPCOMING NEW PROTON PERDANA LUXURY SEDAN
PROTON Holdings Bhd, the Malaysian carmaker that ended partnership talks with Volkswagen AG in 2007, said it’s in early discussions with Renault SA and General Motors Corp about a technical alliance to help make new models.
Talks are “very preliminary,” said managing director Syed Zainal Abidin Syed Mohamed Tahir in an interview today in Kuala Lumpur. “We are just discussing how we can explore working together. An alliance is vital. We need to have scale.” An equity sale isn’t being considered, he said.
Proton needs a partner to develop a new version of the company’s Perdana luxury sedan by next year, he said. While new models helped the Malaysian carmaker, which also makes Lotus sports cars, return to profit last year, it still lacks the size to compete with Toyota Motor Corp and Honda Motor Co in the home market.
“If they don’t improve their economies of scale, then long term, they’re going to find it difficult,” said Kaladher Govindan, head of research at TA Securities Holdings Bhd in Kuala Lumpur. “They’ll be depleting their cash reserves.”
Proton, which had RM1.17 billion (US$339 million) of cash at the end of 2008, spends about RM500 million developing each new model, Syed Zainal said. Proton swung to a loss in the final three months of last year as expenses swelled.
An alliance with a foreign carmaker may also build other models that could be sold jointly in overseas markets, Syed Zainal said. Proton is focusing on the Middle East, China, India and Southeast Asia to cut its dependence on domestic sales. The company wants overseas sales to account for 70 per cent of the total in the next decade from about 20 per cent now.
Renault spokesman Wataru Sato in Tokyo said he is not aware of talks with Proton, nor with any other Asian carmaker.
The global recession has hammered car sales worldwide, and Proton is assessing whether it needs to make an accounting provision, Syed Zainal said. The fiscal fourth quarter ended March 31 was “challenging,” he said, declining to say whether Proton will report a profit or a loss.
“Showing bad numbers today is something of the norm,” he said in the interview.
Sales in the 12 months ending March 2010 may increase from the previous year, and profitability in that period will also probably improve, he said.
Shares of Proton, controlled by Malaysia’s state investment fund, have lost 51 per cent in the past year. The stock was unchanged at RM1.90 as of 10:53 am in Kuala Lumpur, valuing the Shah Alam-based company at RM1.04 billion. The carmaker was worth six times more in 2002.