Malaysia's Proton keen to manufacture cars in India

KUALA LUMPUR, June 22, 2010 (AFP) - Malaysian carmaker Proton said Tuesday it was in talks with an Indian automaker to manufacture Proton cars in a bid to break into the sub-continent's booming small-car market.

Proton also said it will partner Lotus, the UK high-end sports and racing car maker, to manufacture a small, five-door car for Asia and the Middle East.

Proton managing director Syed Zainal Abidin Syed Mohamad Tahir told reporters: "India is a very important market. Yes, we are talking to one party. I can't tell you who they are.

"Yes, we are looking for an Indian partner to manufacture Proton cars," he added.

Syed Zainal said Proton will colloborate with Lotus, which it owns, to manufacture a new "small car," powered by a 1.0- to 1.5-litre engine.

"Hopefully we can produce the car in less than two years. It will be hybrid and combustion models," he said.

Syed Zainal denied reports in India's media that Proton was in talks with India's Mahindra & Mahindra about a possible joint venture.

"There was a discussion with Mahindra & Mahindra several years ago," he said.
Proton previously sought to form a pact with Volkswagen but Europe's biggest automaker scrapped talks about an alliance.

Proton has been searching for a collaborator in a bid to penetrate foreign markets and develop attractive models to compete with growing competition from Japanese, European and Korean carmakers in its domestic market.

Proton was formed in 1983 by then-premier Mahathir Mohamad as part of an ambitious national industrialisation plan. But it has suffered from a reputation for unimaginative models and poor quality.

Proton's net profit for the three months to the end of March stood at 22.8 million ringgit (6.87 million dollars), compared with a loss of 323 million ringgit in the same period a year ago.