Proton Holdings Bhd set for second try at joint venture

Proton Holdings Bhd is once again keen to finalise a partner in India. Only, this time around, it would be for completely knocked down (CKD) operations rather than for building cars from scratch in the country.

The Malaysian car maker, in which the Malaysian government is also a shareholder, has been talking to several Indian companies for a possible partnership for the last few years.

Earlier, Proton was in talks with the Hero Group as also Mahindra & Mahindra, among others. But the talks did not fructify.

The company then began discussions with Argentum, promoted by B V R Subbu and Ajay Singh, for assembling cars at Argentum’s facilities in Surajpur (Uttar Pradesh). Even these discussions reached nowhere.

Now, Subbu himself has been roped in as one of the board members at Proton.

Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir told news agencies in Kuala Lumpur earlier on Thursday that his company will finalise a partner in India for CKD and assembly operations “as soon as possible. We cannot do a completely built-up operation in every core market. It is not economical in the long term. So, in this market, it will be completely knocked down,” he said.

He did not, however, reveal the identity of the local partner.

Syed Zainal had previously said that Proton planned to finalise its India strategy with the Hero Group by the second half of this year. But it is uncertain if he was referring to the same party on Thursday.

Hero officials had held several rounds of discussions late last year with Proton but could not be reached for comments on Thursday.

M&M denied being in talks with Proton.

Since its establishment in 1983, Proton has produced 3.306 million cars and for the current financial year, it is eyeing a 6-7% jump in production volume, agency reports said.

Proton currently exports to about 27 countries. “Currently, the export component is 25% of production. We aim to produce 70% for export and 30% for the domestic market,” Tahir said. It cannot be done overnight and there would be a roadmap for it, he added.