Malaysia’s Proton in talks with China’s Chery

KUALA LUMPUR, May 24, 2006 (AFP) – Malaysian carmaker Proton said Wednesday it is in talks with Chinese manufacturer Chery on a deal to assemble and distribute Proton and Chery models in China, Malaysia and elsewhere in Southeast Asia. Proton said in a statement that the two firms would work on a feasibility study over the next three months “to evaluate possibilities and opportunities for… providing assembly services and distribution of vehicles”.

The government has urged Proton to join forces with strong foreign partners, saying the national car sector cannot survive on its own and must gain entry to the booming auto markets in China and India.

Newspaper reports have said that the Chery tie-up would give the firm a manufacturing base in Malaysia in exchange for allowing Proton cars to be produced in China.

Proton’s manufacturing director Kamarul Zaman Darus said the Malaysian market was already saturated, with high ownership levels and stiff competition from foreign imports.

“Therefore going outside is the key. So China, India and ASEAN would be our future key markets,” he told reporters at an auto conference.

“We are looking at various types of alliances that can bring value to us while not sacrificing our own v