PUTRAJAYA: National carmaker Proton's search for a foreign strategic partner has finally ended, in the form of Chinese automaker Geely.
Zhejiang Geely Holding Group, which also owns Volvo, today signed an agreement to acquire a 49.9 per cent stake in Proton Holdings Bhd.
Second Finance Minister Datuk Seri Johari Abdul Ghani today witnessed the signing ceremony between Geely Holding and DRB-Hicom Group that owned Proton.
"This is a very historic event in our automotive industry. It is a significant milestone for Proton and the country," he said.
Johari said while the deal would result in DRB-Hicom relinquishing 49.9 per cent of Proton to Geely, Proton would remain the national carmaker and a source of pride as DRB-Hicom would still hold the majority share in Proton at 50.1 per cent.
"To all Proton staff, vendors and dealers, worry no further as growth will be created. Proton will be successful and all of you will be the beneficiaries," he added.
The agreement marks the conclusion of DRB-Hicom's search for a strategic partner for Proton to help the ailing Malaysian manufacturer.
Last year, Proton received RM1.5 billion in government aid on the condition that it pursued a turnaround plan and seek a foreign strategic partner.
The deal will also see Proton sell its entire equity in British carmaker Lotus to Geely and Etika Automotive Sdn Bhd, an entity controlled by tycoon Syed Mokhtar Al-Bukhary, which will see the group exit the sports car segment.
Also present at the event were DRB-Hicom Bhd Group managing director Datuk Seri Syed Faisal Albar and Proton chief executive officer Datuk Ahmad Fuaad Kenali.
The deal will enable Proton to tap into Geely Holding’s vast range of platforms and powertrains, and will also enable Proton to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in Southeast Asia.
Syed Faisal said in a statement that the Proton brand would remain and grow significantly with the new foreign strategic partner on board.
“Our intention was always to ensure the revitalisation of the Proton nameplate.
"It was Malaysia’s first national car brand and has more than 30 years of history.
"This deal will be the catalyst to elevate a brand that Malaysians resonate with,” he said.
Apart from Geely, PSA Group, the Paris-based maker of Peugeot and Citroen cars, had also reportey submitted its bid for a stake in Proton. Proton also controls British sports car maker Lotus.
Proton has two Malaysian plants with an annual production capacity of 400,000 cars.
By offering some of its own technology, Geely Holding's presence is reportedly aimed at lifting Proton's sales in the right hand-drive markets including Malaysia, the United Kingdom, India and Australia.