Proton Acquires Engine Technologies From Petronas

Proton pays RM63 million ($20.6 million) to acquire all engine technologies and knowledge developed by government-owned oil company Petronas since 1997.

Proton Chairman Khamil Jamil says the Malaysian auto maker gets immediate ownership of a more powerful and fuel-efficient family of naturally aspirated and turbocharged 2.0L engines, as well as a 2.2L turbocharged version.

The government’s Bernama news agency reports Proton also receives seven engine technologies with 117 patents from Petronas. The deal includes an engine development facility in Bangi, 25 miles (35 km) south of Kuala Lumpur.

Khamil, who signed the acquisition agreement in Kuala Lumpur, says Proton and Petronas initiated the engine-technology exploration in 1996, but Petronas has decided to withdraw.

“So it is time now to take over from Petronas,” he says.

The Business Times says the Petronas powertrain is a result of the oil company’s involvement in Formula One racing and is an aluminum-block gasoline engine with a compact design.

Khamil says the Petronas engine will complement Proton’s Campro engine lineup and the auto maker plans to begin mass production of the engines in third-quarter 2013. “We have undertaken testing with the Proton Exora and Preve,” he says.

After Proton establishes itself as an engine manaufacturer, the auto maker is open to doing business with other OEMs. “With this agreement, we have a new type of engine which is environmentally friendly while providing a lightweight solution,” Khamil says.

The agreement represents a significant milestone for Proton, Khalil says.

“The decision was made after careful consideration and taking into account the overall fit into Proton's turnaround plan and future growth,” he says. “I am confident this will provide Proton with a competitive edge in our pursuit to become a globally competitive automotive manufacturer.”