Proton and Honda sign strategic partnership

MALAYSIAN car-maker Proton has signed an agreement with Japanese giant Honda that could result in the two manufacturers sharing technology and platforms for future models.

A statement issued to the Malaysian stock exchange by Proton’s parent company, DRB-Hicom, says the two companies will “explore collaboration opportunities in the areas of technology enhancement, new product line up, platform and facilities sharing”.

Although no details of the deal have been confirmed, there is scope for future Proton products to share engines and platforms with Honda and for Proton to give the Japanese company access to its under-utilised production facilities.

Honda and DRB-Hicom have been linked since 1985 when they collaborated to form Hicom-Honda Manufacturing Malaysia to build Honda motorcycle engines.

The two companies collaborated again in 2000 to create Honda Malaysia, which led to the setting up of a factory in Malacca that builds a number of Honda models, including the CR-V.

Proton could conceivably use the new tie-up to sell re-badged current or superseded Honda models in Malaysia and other markets, as it has done with another Japanese partner, Mitsubishi, which used to hold a large stake in the company.

A deal with Mitsubishi allows Proton to sell a badge-engineered version of the current Lancer small car in Malaysia as the Proton Inspira.

In the past, Proton has sold re-badged versions of superseded Mitsubishi products and products heavily based on Mitsubishi underpinnings and drivetrains.

The DRB-Hicom statement suggests a possible long-term collaboration with Honda.

“Having a strong and renowned global automotive player like Honda Motor as the foreign strategic partner to Proton will provide Proton … with the opportunity to grow… as the opportunities are endless.”“This collaboration will provide positive impact to Proton and the DRB-Hicom Group in the long run.”The agreement comes ten months after the Malaysian government’s investment arm, Khazanah Nasional, sold its 43 per cent stake in Proton to Malaysian automotive manufacturing and distribution company DRB-Hicom.

Proton was founded in 1983 and his forged a reputation for building cheap, uncomplicated vehicles for the domestic Malaysian market, before expanding to a number of global markets, including Australia.

In 1996, Proton became the majority shareholder of British sportscar brand Lotus, which has struggled to grow in the face of more sophisticated competition.

Honda, Japan’s third-largest car-maker, has experienced a number of recent setbacks, with the devastating Thai floods severely affecting production and sales and the dispute over Chinese-Japanese territories also taking its toll on sales in China.