PSA Group wants Malaysia as its strategic base… if chosen as Proton’s FSP

By ahmadzulizwan ,

If R&D is one of Proton’s weak points, owners of Peugeot and Citroen have the answer

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While some are already convinced that Geely will eventually get a majority stake of Proton’s Tanjong Malim factory and become the brand’s Foreign Strategic Partner (FSP) – despite no direct indication of that from anyone within either companies – things are not quite as formalised in the real world.

A Bernama report quotes an industry source who says that France’s PSA Group has plans to make Malaysia the strategic base to develop and manufacture a new range of cars destined for the global market. That is, if the renowned French car maker is chosen as Proton’s FSP.

While the report does not indicate whether this ‘industry source’ is attached with Proton or the PSA Group (or other companies for that matter), it goes on to say that the Group has plans to open a Asian R&D centre.

Currently the company operates a few facilities for research and development globally, the closest currently being the China Tech Centre. Overall, PSA employs roughly 13,000 people and spends eight per cent of its Group revenue solely for R&D. In 2016, this translates to Euro 2.9 billion.

The Bernama report states that under current condition, Proton is simply unable to compete, locally and especially abroad, as they are still at the bottom of the ladder regarding automotive tech.

The Proton Iriz, for example, took RM600 million to develop, not including additional costs required after production namely marketing, distribution and other related activities. In affect, Proton will need to sell 10,000 units (assuming with a selling price of RM60,000 per unit) before the firm can recover development costs.

Early this week, China's Geely Automobile Holdings Ltd said that it is prepared to share with Proton its know-how, co-developed with its Swedish subsidiary Volvo car, as part of the company's pitch to seek control of Proton.

In addition, Geely's Volvo in Malaysia had attained Energy Efficient Vehicles (EEV) status for its models equipped with Drive-E powertrain last year.

Source: Bernama