GM, VW, Mitsubishi Seek Stake in Proton
Executive Summary
It is believed VW has the inside track because DRB-Hicom is keen to produce a small Malaysian car using German technology.
General Motors, Volkswagen and Mitsubishi reportedly are competing for a partnership with Malaysian auto maker Proton, and new owner DRB-Hicom is evaluating the three rival plans.
The Business Times quotes an unnamed source as saying GM plans to make a pitch to gain control of half of Proton’s production lines at its factory in Tanjung Malim, Perak.
The plant’s capacity is about 250,000 units a year but can be expanded to 1 million a year.
“The deal is valued at about RM800 million ($266.3 million) and was brokered way before DRB-Hicom emerged as a dominant force in Proton,” the source says, but adds the GM proposal “is the least preferred by DRB-Hicom as it will not add value to Proton.”
DRB-Hicom plans to take Proton private this month after reaching an agreement to buy government investment company Khazanah Nasional’s 42.7% stake in Proton for RM1.29 billion ($429.4 million).
The newspaper says it is believed DRB-Hicom is keen to work with VW to produce a small Malaysian car using German technology.
Mitsubishi, meanwhile, reportedly proposes using Proton’s excess plant capacity to produce some 200,000 engines with 100-125 hp. “They haven’t decided on the chassis yet, but mostly it is for the export market,” the source is quoted as saying.
DRB-Hicom has called a March 14 meeting to ratify its acquisition of the shares from Khazanah and to make a mandatory offer for all the other shares not owned by Khazanah.
