PROTON AND HAWTAI MOTOR GROUP SIGNS MOU TO EXPAND PRESENCE IN CHINA

PROTON Holdings Berhad looks to inking a new or additional partnership with an automotive group in China. Earlier today they signed a memorandum of understanding (MoU) with Hawtai Motor Group Ltd. This is to explore collaboration in product development to further expand its presence in China. Under the MoU, PROTON and Hawtai Motor Group will evaluate the possible establishment of a Joint Venture Company (JV Co.) in China, to invest in product development to develop new models together, via joint design and development cost sharing. Both companies will spend the next three months finalising their study of the business case.

The MoU was signed between the PROTON Group Managing Director, Dato’ Sri Haji Syed Zainal Abidin Syed Mohamed Tahir and the Executive President of Hawtai, Mr Hou Haijing and witnessed by the Prime Minister of Malaysia, Dato’ Sri Mohd Najib Tun Abdul Razak; the Minister of International Trade and Industry Datuk Mustapha Mohamed and top Chinese central government officials; as well as PROTON Chairman, Dato’ Sri Mohd. Nadzmi Mohd. Salleh along with other senior government officials at a ceremony in Nanning. As part of the initial phase after the establishment of the joint venture company, PROTON will license its current models to Hawtai Motor Group to be manufactured at the Hawtai manufacturing plant in China for sale in the Chinese domestic market under the Hawtai brand, with possible co-naming with PROTON.
Initial products being considered for manufacturing are the Proton Exora MPV and the P3-21A model, which is expected to be unveiled by PROTON early 2012. Both companies will also explore the development of new models together in later phase. The joint venture company will also be responsible for vendor sourcing and component development work with local Chinese vendors. This will allow PROTON to tap into the low cost base vendors in China and explore the potential of cross-supplying components from local Malaysian vendors to China and vice-versa. “The MoU and the potential of a long term relationship with Hawtai Motor Group is in line with efforts to establish China as one of PROTON’s major manufacturing hubs by utilising our partner’s local manufacturing capabilities, as well as network in sales and distribution,” said PROTON Chairman, Dato’ Sri Mohd. Nadzmi Mohd. Salleh. “This is another important and significant milestone for PROTON as we embark on yet another strategic partnership in one of the world’s largest economy.”
Hawtai Motor Group is based in Beijing and was established in 2000. The company today has an annual production capacity of 200,000 vehicles, 300,000 engines and 300,000 auto transmissions. In 2002, Hawtai was involved in a joint venture with Hyundai Motors to manufacture the Chinese-market versions of the Hyundai Matrix, Hyundai Santa Fe and Hyundai Terracan. The Santa Fe went on to become the fifth most-purchased sports utility vehicle (SUV) in China in 2010 and have experienced continued popularity in the Chinese market. Hawtai’s current line-up of vehicles includes a luxury sedan suitable for use by Government officials and the business community in large and medium-sized Chinese cities. The sedan is powered by 1.8- to 2.4-litre petrol engines, and a two-litre diesel engine. The company also produces the Hawtai Terracan SUV, equipped with high performance 2.4-litre petrol, two litre and 2.4-litre diesel engines, and an intelligent four-wheel drive system. Hawtai also has its first self-developed B-class SUV which features full dynamic and sporting qualities for families in medium and large cities.
“We certainly look forward towards finalising the discussion on this product collaboration to achieve what hopefully will be an outcome that will provide synergy to the future of plans of both companies,” said PROTON Group Managing Director, Dato’ Sri Haji Syed Zainal Abidin. ‘We will consider all potential angle of this joint product development and this will include looking into new models manufactured by Hawtai Motor Group that are suitable to be redeveloped to replace existing Proton models, with both companies sharing the development and tooling costs.”