Partnership with Geely will relive Proton glory - Johari

Following the strategic partnership, he said Proton would emerge as a formidable automative player in the Malaysian, ASEAN and global markets.

"The signing ceremony between DRB-HICOM and Geely Holdings marks a significant milestone for Proton and the country. Our very own and much-loved brand now has a real chance in making a comeback, a huge one I hope.

"As a national car, the government will be here to watch and to support the future of Proton any way we can," he said before the signing ceremony between DRB-HICOM and Geely Holdings here today.

The strategic partnership is part of the condition placed by the government for Proton to received RM1.1 billion reimbursement from the company''s RM3.5 billion research and development spending.

Johari said there was nothing wrong for Proton to have alliance and partnership.

"In the automative world, it is very common. In fact, TATA partners with Land Rover and Jaguar, BMW partners with Mini and Rolls-Royce, and Renault, Nissan and Mitsubishi are all in one big alliance," he said.

Johari said Proton has been in a highly challenging situation over the last few years following the declining sales and cash flow constraint.

"Therefore, with a strategic partner, Proton will be able to alleviate the brand value and consumer confidence, access to the latest technology, achieve higher economies of scale and ability to access bigger market beyond Malaysia," he said.

With the Head of Agreement today, that both parties agreed with the terms, Johari said government would facilitate to make sure Proton would remain a national car.

He said Geely, as best automotive player in China and among the best in the world, would give assistance to Proton to become the number one brand in Malaysia, ASEAN and also China.

"We want to make sure the entire value chain of vendors and suppliers to be given priority to participate in these development. With Geely''s experience in developing the vendors and suppliers, that will benefit us in terms of volume... not only supply of cars or parts for Malaysia''s market, but also the market where Geely is," he said.

On retrenchment, Johari said DRB-HICOM and Geely had assured that they would keep the entire team and jointly manage Proton.

"I don''t see the needs to do any retrenchment because this strategic partner will bring the cars and give the right volume," he said.

Geely Group Executive Vice-President and Chief Financial Officer Daniel Donghui Li said Malaysia and Southeast Asia were an important location for the company''s future growth.

He said the company aimed to sell three million cars annually by 2020 and the region was targeted to contribute 500,000 car sales.

"With Proton and Lotus joining the Geely portfolio of brands, we strengthen out global footprint and develop a beachhead in Southeast Asia," he said.

Last year, Geely sold a combined 1.3 million vehicles worldwide.

DRB-Hicom Bhd Group Managing Director Datuk Seri Syed Faisal Albar said the strategic partnership with Geely would ease the capital commitment of DRB-Hicom for Proton, as well as the commitment for research and development.

He said the deal also excluded land assets outside Tanjung Malim, Perak, including Shah Alam which would be transferred to DRB-Hicom in the future at a fair price after relocating all its manufacturing operations to Tanjung Malim.

He said the land asset could then be developrf by DRB-Hicom and thus, would bringsmore revenue to the company.

Nevertheless, he said the relocation process was only expected to take place within five years.

On the disposal of Lotus, he said the British carmaker was sold at 100 million British pound sterling to Geely, which would hold 51 per cent equity, while Etika Automotive Sdn Bh, 49 per cent.

Etika Automotive is own by the same shareholders of Etika Strategi Sdn Bhd, a company that holds a 51 per cent stake in DRB-Hicom, he said.

HSBC is Geely's financial advisor in the transaction, while Quantephi Sdn Bhd is the financial advisor for DRB-Hicom.

Geely's and DRB-Hicom are expected to sign the Definitive Agreement in July 2017.