Malaysian carmarker Proton tries to sell technology now

Malaysian carmaker Proton is once again changing tack to enter India.

Instead of manufacturing and selling cars here through a tie-up with Argentum Motors, it is now trying to sell a vehicle platform technology.

But Argentum is not biting the bait — at least not yet.

Sources said given the global economic downturn, Proton has decided against making the kind of investments needed to build and sell 2-3 car models in India.

A few months back, Proton had been testing 1.3 litre ‘Saga’ and 1.6 litre ‘Persona’ on New Delhi roads and these were among the models it had decided to manufacture at Argentum facilities for sale in India.

“They now want to sell us the vehicle platform technology but it will make sense only if comes at a decent price. Those negotiations are going on,” sources said.
Proton’s now-on, now-off Indian strategy follows earlier unsuccessful talks with several Indian vehicle makers including International Cars & Motors (Sonalika Group) and Hindustan Motors.

Late last year, it had even decided that separate manufacturing and marketing/distribution alliances would work better for this market.

That is when it approached Argentum for the manufacturing alliance. Argentum has been co-promoted by B V R Subbu and Ajay Singh and has the facilities for making complete vehicles as well as powertrains at Surajpur (Haryana).

Sources also tell us that Proton has held discussions with other Indian automobile majors — Mahindra & Mahindra and the Hero Group —- for marketing and distribution of its cars but these talks have remained inconclusive.

Proton is a Malaysian government-owned company. Though its vehicles are considered high end, quality and finishing issues have been a recurring problem.

Due to this, the company has been losing sales in the home market, and, as a corollary, also been plagued by very high cost per car, say dealers.

A long-time Proton dealer avers that the company is “rather slow in decision making since it is government-run. Its high cost per car is also because there are no economies of scale.” He said Proton has its own manufacturing facility only in the home country and assembly units in Indonesia and Iran.

“Proton supplies CKD to all other global operations…….no wonder it is hesitating over whether to set up a full-fledged facility in India or get vehicles contract-manufactured,” the dealer said.

But despite having low production volumes, Proton has access to some of the latest vehicle technologies through its acquisition of British marque Lotus Technologies some years back. Some of its popular models include ‘Saga’ and ‘Wira’ sedans, ‘Satria’ or the Proton Compact and ‘Putra’ sporty coupe.