Mitsubishi, Proton in Talks Over Extending Collaboration

Malaysian auto maker Proton and Japan’s Mitsubishi are discussing a strategic collaboration for the joint production of engines in Malaysia and consignment production of Mitsubishi-brand vehicles at Proton’s facilities.

They also are talking about sharing major parts and components between both of their upcoming global small cars, and Mitsubishi providing future electric, plug-in hybrid and hybrid-vehicle technologies to Proton.

Proton Inspira rebadged Mitsubishi Lancer.

The auto makers say feasibility studies begun in late 2010 have identified areas of collaboration that could provide synergy in the pursuit of global competitiveness.

The alliance between Proton and Mitsubishi goes back 26 years.

The auto makers signed an agreement in 2008 on the development and production of new vehicles at Proton; under a license agreement, the Malaysian car company is producing the Inspira, a 4-door sedan based on Mitsubishi’s Lancer.

Mitsubishi says the current talks could lead to a greater presence in the Association of Southeast Asian Nations market, while Proton sees opportunities to expand its product lineup and make effective use of its production facilities.

The Edge Financial Daily says details of the joint-venture agreement will be finalized within the next two months. The precise shareholding structure of the JV isn’t being made public, but Proton is believed to be taking up a controlling stake.

Mitsubishi reportedly will use Proton’s assembly plant in Tanjong Malim in the state of Perak to build cars for export to the ASEAN region.

Proton Managing Director Zainal Abidin says a collaboration with Mitsubishi would boost sales.

“I'm sure it (also) will increase the revenue, but first is we need to finalize,” he tells the newspaper. “It will definitely increase our revenue, it will definitely increase our margins and, more important, we need to utilize our capacity.”