KUALA LUMPUR, Malaysia – Malaysia unveiled plans Wednesday to open up its auto sector, including allowing 100 percent foreign ownership and offering a 10-year tax break for carmakers to produce hybrid and electric vehicles as it seeks to catch up with Thailand as a regional auto hub.
The trade ministry said it will also end a three-year freeze on manufacturing licenses for luxury cars with engine capacity of 1.8 liters and above and priced mbt women’s shoes at no less than 150,000 ringgit ($44,118) as well as for hybrid, electric and commercial vehicles.

It also scrapped rules requiring part of the equity to be allocated to ethnic Malays in these areas, allowing foreigners to now hold 100 percent ownership in a move to lure investors.

The measures are part of a new national automotive policy effective January to make the sector more competitive as Malaysia strives to compete with neighboring Thailand, which has gained a reputation as the “Detroit of the East.”

“It is true that Thailand has done a lot better than us … we would like Malaysia to be more competitive. We want a viable auto sector. We want Malaysia to be a hub for the auto industry,” Trade Minister Mustapa Mohamed told a news conference.

Malaysia is Southeast Asia's largest passenger vehicle market, with about half a million vehicles sold annually.

But its policy to protect national players such as Proton and compact carmaker Perodua through ownership constraints and high taxes put it at a disadvantage against Thailand, which has no domestic automakers and has emerged as a regional base for many global car manufacturers like General Motors Co. and Toyota Motor Corp.

Mustapa said the government wants state-controlled Proton to tie-up with an established global player to ensure its long-term survival. He said talks are ongoing but declined to give details.

“We know there have been many discussions … we hope it will be finalized very soon. We have no deadline, it's a business decision,” he said.
Once the king of the road, Proton's fortunes have dwindled due to growing competition. Proton has been hunting for a foreign partner but the government's insistence on maintaining control over a national corporate icon has made it difficult for Proton to seal any meaningful partnership.

Germany's Volkswagen AG ended alliance talks with Proton in 2007 but recently revived negotiations.

Mustapa said Malaysia would focus on niche sectors including hybrid and electric cars which have large untapped potential in the region.

The government will offer a 10-year tax break, customized training and research grants and excise duty exemption for assemblers and manufacturers of hybrid and electric vehicles and components. It will also draw up plans to develop infrastructure for electric vehicles, he said.

Mustapa, however, said the current auto tax structure remained unchanged. Import duties were lowered three years ago but Malaysia still has high local excise taxes ranging from 60 percent to 105 percent on vehicles.

He said a controversial auto licensing rule for MBT Shoes importers will only be scrapped by 2020, instead of 2010. There will be no “quantitative restrictions” on car imports by 2020 in a further liberalization of the market, he said.

Car manufacturers and analysts cheered the new liberalization measures.

“Malaysia has been very much behind Thailand and this is a good opportunity for us to catch up,” said Aishah Ahmad, president of the Malaysian Automotive Association.

Ahmad Maghfur, auto analyst with OSK Research, said Malaysia hopes to woo European car manufacturers to set up base here by MBT Women’s Shoes liberalizing the luxury car segment.

At the same time, Proton and other local players remain protected with no changes in the tax structure and continuous government grants offered to them, he said. – AP

KUALA LUMPUR, Malaysia

Malaysian national carmaker Proton said Monday it plans a revamp that will give it more flexibility to form alliances with foreign partners after reporting a 55 percent jump in quarterly profit.

The maker of the Waja and Pesona sedans and the Exora seven seater multipurpose vehicle posted a net profit of 84.7 million ringgit ($27 million) for the quarter through June.

Revenue rose 24 percent year-on-year to nearly 2.3 billion ringgit ($735 million) thanks to stronger-than-expected car sales, which were up 17 percent to nearly 40,000 units.

Chairman Mohamad Nadzmi Mohamad Salleh said Proton aims to set up four strategic business units as part of a restructuring to boost its operations and make it easier for the state-owned company to tie-up with foreign automakers.

He said some parties are keen to cooperate with Proton in manufacturing or engineering, without having to take an equity stake in Proton as "they don't want to manage the brand."

"We will be undertaking a big restructuring to be more efficient, leaner ... and to give more flexibility to form strategic alliances that don't really involve the whole group," said Managing Director Syed Zainal Syed Mohamed Tahir.

Proton declined to give more details, saying the proposal will be firmed up in the next few months and implemented in the next financial year.

The car maker returned to the black in the financial year ended March but is under pressure to bolster exports for its long-term survival. Analysts said it would need to find a global partner if it wants to survive in the long-run.

The government's insistence on maintaining control over the national corporate icon has made it difficult for the carmaker to seal any meaningful partnership.

It said in June that Volkswagen AG declined to collaborate because the German carmaker has other priorities -- the second time talks between the two have failed. Volkswagen later inked a deal with Malaysian auto group DRB-Hicom to assemble and manufacture VW cars in the country.

Syed Zainal said Proton targets 20 percent revenue growth for the fiscal year through March 2011, and market share to rise to 33 percent from below 30 percent last year. It expects to sustain sales with a new upgrade to the popular Waja sedan in October.

Proton is also working on a hybrid electric vehicle, which should be ready for testing by the end of the year before deciding whether to embark on mass production, he said.

By EILEEN NG

Proton yesterday unveiled some new images of the Proton EMAS Concept alongside with a Lotus-badged version. Both cars will be aimed at very different markets, with different powertrain combinations, while still sharing the same basic platform allowing better economies of scale.

From our understanding, the Lotus Global Small Car will be positioned at a premium, with a shorter wheelbase and a three-door hatch body compared to the Proton badged version.

Possible powertrains include a plug-in EV or series hybrid with range extender (Lotus Omnivore) or a turbocharged small engine of around 1.2 liters of capacity or lower. Benchmark models for this car are vehicles like the MINI EV or the electric Smart.

This particular photo is an update of what the production Proton global small car based on the 5-door Proton EMAS could look like. As you can see the design has been revised compared to the one first shown in Geneva 2010 and later at the Proton 25th Anniversary Gala Dinner.

This one looks like it has inched closer to being a production design and the front end looks sharper and sportier, with the headlamps angled upwards.

Proton’s benchmark for their new global small car is vehicles such as the Toyota Aygo or the Nissan March – practical and youthful at the same time. Proton is looking at installing a small and fuel efficient engine to go with this car, and they are also exploring diesel options for the Indian market.

by Paul Tan via Paul Tan's Automotive News

The Proton Savvy is the first city car Proton have sold in the UK. It encapsulates the „Savvy buy' with competitive pricing, distinctive styling and a range of equipment that's sure to put a smile on every shopper's face.

Who's the Savvy buyer?

The Proton Savvy buyer demands more from their vehicle. Style, practicality, reliability and value for money are important, but when push comes to shove it's pride that counts - being proud to drive the car and feeling good because of what it says about that person.

With distinctive styling both inside and out, a spacious and airy interior, comprehensive warranty, great specifications AND a starting price of just £5,995 (RM 38948) on the road, the Proton Savvy is a car that anybody would be proud to own. Combine this with great customer service and friendly dealers, and it's definitely a winning package.

The Proton Savvy is a car that will transcend all age boundaries - it's sporty styling, superior ride and handling, low insurance group and low price will appeal to younger buyers looking for a great value, great looking car that's a bit different from the norm, an economical engine and a wealth of features will ensure that older buyers are not alienated. The Savvy is key to Proton's strategy of customer acquisition, but it's features and benefits mean that it is sure to be a popular choice for current owners in the market for a new car.

The Savvy - a Proton through and through

Proton believes that driving should be fun and that every one of its cars should deliver superb ride and handling. Progressive technology is evident across the range - not just in performance but in safety measures and standard equipment. The Proton Savvy has joined this tradition of offering everything motorists have come to expect from a Proton - and more.

There are three other cars in Proton range; the Impian, a spacious four door saloon, the three door supermini Satria Neo and the GEN-2, which is now available in both five door and saloon variants.

After many years of going around in circles talking to companies such as PSA Peugeot Citroen, Volkswagen and GM, Proton has finally ended up at a familiar place, Mitsubishi Motors. Proton announced to Bursa Malaysia today that it has entered into a product collaboration program with Mitsubishi Motors Corporation, Japan. The following is the scope of the product collaboration:

• A Development Agreement, to develop a new Vehicle Model for PROTON based on details of work, target specifications, job sharing and time schedule as determined by both parties (“Licensed Product”).
• A Licence Agreement, where MMC grants PROTON a non-exclusive license to use technical assistance and patents solely for the purpose of utilization of technical information for restyling, modification and improvement work, manufacturing of local parts, assembling, selling and after sales services / support of the Licensed Product to be sold under PROTON’s trademark and styling; and
• An Engineering Services Agreement, wherein MMC will provide the work and services for PROTON’s manufacturing of the Licensed Product.

The new Lancer-Waja will likely be priced at a higher price point than the current Waja CPS, but lower than the Perdana. We’ll also get the GEMA series of engines that comes with the Lancer, though it’s not clear at this moment which one. The GEMA engine is available in 1.8, 2.0 and 2.4 liter displacements.

Other proposed areas that Mitsubishi and Proton are in discussions about include the rebadging of the Persona and the 2009 Proton MPV as a Mitsubishi in certain markets and the joint development of an A-segment hatchback (a new Savvy-sized vehicle), but when contacted by this blog, sources in Proton indicated these additional projects are at best only in discussion stages only, and not something confirmed.

In fact, an A-segment hatch may not be such a good area for Proton to venture into right now, given how price sensitive the A-segment market is. Maybe later, if Proton gains enough technical know-how on how to build a car cheaply and once it has enough economies of scale to price it low yet make a sufficient profit.

The only two car manufacturers enjoying success in that market segment are Suzuki and Daihatsu, who are experts in small cars. It’s very hard to profit and with the current condition of Proton’s economies of scale, I doubt Proton could create an A-segment hatch that could have the right features, quality and price to enjoy a decent amount of success whether in Malaysia or overseas.

I doubt even accounting for the potential units sold under the Mitsubishi badge could help out there as Mitsubishi themselves do not have much successful experience in that area.

StarBiz revealed today that the Mitsubishi vehicle to be provided to Proton is the new Lancer, which will be used to replace the Waja. A quick check with sources inside Proton revealed that the vehicle would pretty much be a Lancer with only minor changes to the design, even less than what Mitsubishi Taiwan has done to their version of the Lancer.

by,

Paultan

Proton records RM105 mil profit in Q1, growth all areas

National carmaker Proton announced its financial results for the first quarter of the company’s 2010/11 financial year. It was positive figures across the board, with a headline of RM105 million profit before tax in Q1. This is significantly more than the RM13 million profit made in the previous quarter (Q4 09/10). In the same period of the previous financial year, Proton posted RM64 million profit before tax.

Riding on the 19% growth in Malaysia’s Total Industry Volume (TIV) for the first half of 2010, Proton sold 39,994 vehicles in Q1, which is 8% more than the corresponding period in 2009. Similarly, revenue rose to RM2.29 billion from RM1.85 billion.

Some of you might have been surprised at Proton’s position in our recent Thai market report post (Exora is the best selling MPV in Thailand), and the company is happy to announce that total exports have increased by 88% (8,303 units) compared to Q1 09/10. This figure takes into account the Gen2 and Persona CKD kits exported to China, which amounts to 60-65% of total exports. In the longer term, the company plans to introduce the Proton brand in China, making the world’s largest auto market its left-hand drive hub.

Proton, which has a presence in 29 countries, is working hard to boost exports as “the domestic market has reached saturation point and exports are needed to increase economies of scale,” according to Proton Chairman Dato’ Sri Mohd Nadzmi Mohd Salleh.

by,

Paultan