Automaker Proton Seeks Foreign Partner as Report Points to Geely
(Bejing) — Malaysian automaker Proton Holdings Berhad said it is selecting a foreign strategic partner to revitalize the company, as media reported one suitor was Geely, a leading Chinese player.
Proton, together with owner DRB-Hicom, is in the process of identifying the ideal partner, and will announce the result by the end of June, DRB-Hicom said in a statement on Wednesday.
Hong Kong-listed Geely Automobile Holdings Ltd. was competing with France’s PSA Group, maker of Peugeot and Citroen cars, to become Proton’s partner, Malaysia’s The Star reported recently, citing unnamed sources. Both companies are currently doing due diligence, the report said. Geely told Caixin that it wasn’t in touch with Proton.
DRB-Hicom recorded a net loss of 240 million Malaysian ringgit ($53.9 million) for the third quarter of 2016, reversing a net profit of 75 million ringgit a year earlier. It blamed the poor results on lower vehicle sales at Proton.
Geely’s mainland-based parent company, Zhejiang Geely Holding Group Co. Ltd., made its name in the global market in 2010 when it paid $1.8 billion for Volvo, even though the Swedish carmaker’s revenue was then 20 times that of its new owner’s. Geely Holding Group also made headlines in 2013 when it purchased the struggling Manganese Bronze, maker of London’s famous black taxis and now known as The London Taxi Co.
Revenue of the Hong Kong-listed Geely has grown by 50% since the Volvo acquisition, and its parent has been seeking more opportunities outside China. In 2014, it held talks with Proton for collaboration in technology, Chairman Li Shufu said in an interview last November.
China is the world’s largest auto market, but its domestic companies have had limited success exporting their cars. Total vehicle exports reached just over 800,000 last year, up 7.2%, according to the China Association of Automobile Manufacturers. But revenue from exports fell 4.24% to $76.7 billion for the year.
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