KUALA LUMPUR, Malaysia—Malaysia’s struggling national carmaker Proton on June 15 joined forces with Japan’s Suzuki Motor Corp. in its latest bid to boost sales by targeting the compact car market.
Proton inked a memorandum of understanding and license agreement with Suzuki to “form a long term strategic collaboration and partnership,” the companies said.
Proton officials said production will start in the next 16 months at Proton’s huge but underutilized plant in Tanjung Malim in northern Perak state. It will begin with the assembly of a Suzuki car, to be sold under a Proton badge, officials said.
Proton Chairman Mahathir Mohamad, who is a former prime minister of Malaysia, said Proton will initially rebrand and sell Suzuki models, before exploring the possibility of jointly developing new models in the longer run.
“This is one of our attempts to enhance the performance of Proton,” Mahathir said. “We feel that we can learn and work with this company because it has the technology for compact cars and small cars.”
Asked if Suzuki will take up a stake in Proton, Mahathir said it is still early days.
“There are many possibilities. I can’t confirm that yet,” he said.
The partnership will help Suzuki, which currently imports fully built-up cars into Malaysia, to establish a manufacturing foothold in the Southeast Asian country, said its chairman Osamu Suzuki.
Proton, once king of the road in Malaysia, is struggling to boost sales after its fortunes dwindled due to greater foreign competition. Proton’s share of domestic car sales has plunged from about 50 per cent a decade ago to 21 per cent last year.
Proton’s partnership with Suzuki sets up a head-to-head clash with second national carmaker Perodua, which produces compact cars and is the No. 1 car brand in Malaysia.
Mahathir, who founded Proton in the early 1980s during his rule, said there is room for competition as domestic market has expanded. He said combined sales of the two national carmakers have fallen to just about half of the domestic market.