Business / Corporate

Geely bid for Proton not a major threat to Japanese automakers, expert says

Nna/kyodo

Chinese automaker Zhejiang Geely Holding Group’s planned purchase of Malaysia’s Proton Holdings will likely pose no major threat to Japanese competitors in the local market or elsewhere in Southeast Asia, according to an industry expert.

The Geely-Proton partnership may somewhat affect Japanese firms, but it will not have much impact as their reputation and status have been “very strong and solid” in the Southeast Asian market, said an automotive analyst who declined to be named.

“There are already a few cheap-priced Chinese brand models sold in Malaysia and they have had only a small impact on Japanese vehicle sales,” he said.

DRB-Hicom, a leading Malaysian automotive investor which acquired Proton in 2012, announced last month that it will sell a 49.9 percent stake in the firm to Geely.

“This is a good opportunity for us to break into the Southeast Asian market,” Li Donghui, Geely’s executive vice president, said in a news release issued on May 24. “Geely’s target is for Proton to produce 500,000 cars by 2020 for the Southeast Asian market.”

Proton — which once dominated the Malaysian car market after it was established in 1983 with the help of Japan’s Mitsubishi Motors — has been struggling for years without a foreign partner, with its market share plunging to around 12 percent last year from a peak of over 70 percent in 1993.