Proton goes back to Mitsubishi

MALAYSIAN car-maker Proton is returning to original partner Mitsubishi for future collaborations, starting with a rebadged Lancer to replace its aged and slow-selling Waja small car.

Proton had been expected to sell a major shareholding in a bid to strengthen its global position, but instead went back to Mitsubishi with a non-equity technical and product-sharing deal designed to expand its model range, improve quality and meet new technology challenges.

Under the agreement announced on Friday the two companies will also jointly develop and produce a new Proton model, expected to be a city runabout.

In the meantime, the new Lancer-based and Japanese-built Waja replacement, which will reportedly be almost identical to the Mitsubishi donor vehicle, is expected to go on sale in 2010.

While previous Protons were all Mitsubishi-based, the Waja was the first car exclusively designed and built by Proton, and was launched globally in 2001, including in Australia.

Although Proton and Mitsubishi are saying little about their future model plans, reports out of Malaysia suggest that the joint-development will be an A-segment mini-car and that Proton’s Persona sedan and an upcoming MPV could be sold by Mitsubishi in some markets.

Proton – which was established in 1985 by the Malaysian government – was courted in recent years by other car-makers seeking a strategic low-cost Asian partner, but last year broke off alliance talks with Volkswagen (which wanted a controlling interest), General Motors and PSA Peugeot-Citroen.

The new deal does not involve an equity holding by Mitsubishi Motors Corporation and is simply a technical and product-sharing arrangement between MMC and Proton Holdings.

MMC president Osamu Masuko said last week that his company has had “a good long and healthy business relationship with Proton over the years” and welcomed ideas for future programs, adding that any announcement of new collaborations between the two parties should come from Proton.

According to Malaysian English-language daily newspaper The Star, Proton managing director Datuk Syed Zainal Abidin Syed Mohd Tahir said before the Mitsubishi announcement that there was a strong pull among global car-makers to produce a small car or an “A-class segment car”.

“By ‘small car’, I mean a small hatchback, one with space and that offers fuel economy. It’s in demand now,” said Mr Syed Zainal.

“It must be a joint development and I can assure you there is no lack of interest.

“Today we are sitting on an opportunity and we need to act fast. The time is right for us to look (for a strategic partner). The current global crisis gives us an opportunity and, going forward, we need to have better economies of scale.” In a brief statement issued in Tokyo, MMC said it is “continuing to study other mutually beneficial avenues of collaboration” with Proton.

“Through this and other collaboration projects in the fields of development and production, MMC aims to expand its Malaysian business beyond the current export shipments of built-up cars from Japan to that nation,” said Mitsubishi.

“For its part, PONSB (Proton) aims to work with MMC to expand its model line-up as well as to raise quality levels and make more effective use of its production plant.” Mitsubishi helped to set-up Proton more than two decades ago, but reportedly fell-out with the independent-minded Malaysian company and sold its stake in 2004, while continuing to supply engines, transmissions and other components.

The original Proton Saga was based on a Mitsubishi Lancer and other Proton models based on Mitsubishi platforms included the Wira and the Perdana.