Proton seeks to change fortunes around with help from China's Geely

Malaysian carmaker Proton started production of its popular X70 SUV, which is based on Chinese stakeholder Zhejiang Geely Holding Group's Boyue model, on Friday at its plant in Tanjung Malim, paving the way for its ambition of becoming the No 1 brand in the country.

The SUV, which has been one of the best-selling models in Malaysia since its launch in 2018, has been produced at Geely's plant in China. The X70s produced at the Malaysian plant are expected to hit the market in the first quarter of 2020.

Founded in 1983, Proton has reported losses for years and had resorted to state aid for survival, hit by intensifying competition from Japanese rivals such as Toyota Motor Corp's Daihatsu and Honda Motor Co.

Geely, owner of Volvo Cars and also a stakeholder of German auto group Daimler, has been injecting cash and new technology to help Proton's turnaround since it acquired 49.9 percent of the company in 2017.

With Geely's help, Proton launched five new models over the past year including the popular X70 and saved at least $50 million in costs, said its chief executive Li Chunrong in an interview with Reuters.

Geely and Proton have invested over $288 million to expand and upgrade Proton's manufacturing facilities at the Tanjung Malim plant, which will also be capable of producing other Geely models.

Proton Chairman Syed Faisal Albar said, "By updating and expanding our industrial footprint in Tanjung Malim, we are now better placed than ever to grow Proton as a global brand."

"This updated plant will not only produce future products jointly-developed with Geely, but will also be a center for right-hand drive production as we begin to export Proton vehicles to global markets."

Proton wants to claim the top position in Malaysia and become a top three player in Southeast Asia where it currently ranks the ninth biggest, as it looks to export to the key markets of Thailand and Indonesia.

The Malaysian company is nearing its target of selling 93,000 cars this year and expects sales to hit 100,000 units, up around 54 percent from last year. It is now the country's second best-selling carmaker.

Li said Proton could return to profit this year after years of losses, driven by new product launches and aggressive cost-cutting under joint management with Geely.

"I think this year we could make a profit. Financial performance has improved a lot. You will see the numbers at the end of this year. We are confident that next year we will be profitable," Li said.

He told Reuters that Proton is likely to set a 2020 target of a 30 percent rise in vehicle sales from 2019. Geely President An Conghui said, "We will continue in supporting Proton with leading technology as it grows in the Malaysian market, as well as in the wider ASEAN region and beyond."