Proton to make cars in China with Hawtai (InsyaAllah!)
Published October 26, 2011
We reported on Proton-Hawtai happenings a while back, but largely took them to be rumor. It seems to be a very strange situation right now, you may remember that Proton signed up with Youngman to introduce Proton vehicles under a licensing agreement that would see Protons made in China by Youngman but re-badged as Europestar, apparently Europestar wasnt a great seller so they quietly shifted the name to Lotus (in Chinese) which helped them shift more cars than usual. Later Hawtai signed a deal with Saab, but that fell through, Youngman was in the background waiting to pick up the pieces now Hawtai is ready to pounce on Proton. Is this Hawtai plotting revenge against Youngman for taking Saab out of their hands, or are Proton upset with Youngman, or perhaps we are reading to much in to it?
The Bernama.com.my reports:
Proton Group Managing Director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said both parties were still discussing whether to use Proton brand or Hawtai brand in pushing its cars into China, but more importantly was his companys plan to have access to a low-cost manufacturing base.
What we look forward to is one day InsyaAllah (God Willing) to get our cars produced in China. From China we can export out to other left-hand-drive markets, for example, the Middle East.
The production cost will be much more competitive. This is one of the big objectives we want to have.
We cant rely on Malaysia to export left-hand-drive vehicles. We can use China as a base and because they have a big volume here and our partner will provide us with the facility, knowledge and infrastructure, he said.
Syed Zainal Abidin said Proton products in the C and B segments would complement Hawtai Motors 4X4 vehicles and D-segment sedans.
Hawtai also has a very big plant producing diesel engines for the domestic and export markets.
So we can also use their diesel technology into our cars to go into the diesel market, for example, in India.
So, the discussions are not only about products but also on technology traner, he said.
Hawtai Motor has an annual production capacity of 200,000 vehicles, 300,000 engines and 300,000 auto transmissions.
As for the China market, he said one would not produce cars for a huge market a few hundreds.
The potential of Proton cars should be 50,000 to 100,000 per year and for every unit, Proton would receive some revenue whether in terms of components, sales or royalties for the technology transferred.
So what about the Youngman joint venture? Zainal Abin commented:
On Youngman Automobile Group,Syed Zainal Abidin said: Our relationship with Hawtai is complementing our existing relationship with Youngman. We;ll continue to support Youngman based on our current business arrangement,
Youngman is a straight forward licensing agreement. Hawtai is a different arrangement altogether, different platform, so this by no means would conflict our relationship with Youngman, he added.
So Youngman is a licensing agreement, which we knew about, but the Hawtai deal seems to be taking Protons possibilities in China to an all new level. Youngman wanted to set up a car brand to compliment its bus business, but they lacked the technology and the know how, Protons offerings gave them a foundation on which to build a brand and multiple cars. The Hawtai-Proton deal, which was inked today, seems to show that the company is looking beyond licensing and wants to mass produce cars in China according to Chinese media reports. Hawtai has strong diesel abilities, where as Proton has strong petrol abilities with Euro 5 engines, Hawtai has been using bought in SAIC engines to develop its new sedan line up but they do have their eyes set on selling cars to Europe in the future. The two companies, both small scale manufacturers with a global vision could potentially be interesting bed fellows in the next few years.