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NEWS UPDATES 19 March 2010

Malaysia’s Proton continues talks with India’s Hero

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Proton Holdings Bhd will announce whether it will collaborate with India’s Hero Group, the world’s largest motorcycle maker by volume, in the second half of the year, reported the StarBiz.

Previous reports claimed that Proton had been in talks with the Indian motorcycle manufacturer to build small passenger cars for the Indian market.

“We are in discussion (but) we have many things that we need to iron out. We will announce something in the second half of the year,” Proton group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir told reporters after the company launched its Proton Persona Elegance Thursday.

Syed Zainal said the appointment of Behara Venkata Rama Subbu of India as Proton’s new board member earlier this month was crucial and would help fast-track the company’s expansion into the market.

“He (Subbu) has experience working in India and we want to tap his knowledge. We want to go to that market as soon as we can.”

In its research note earlier this month, OSK Research said the appointment of Subbu to Proton’s board was a positive step towards the national carmaker’s plan to enter India.

“Proton has identified India as a potential key market for its overseas business turnaround due to the country’s sizeable population and low vehicle penetration, with an average of 15 vehicles per 1,000 persons.

“With roughly 75 percent to 80 percent of India’s vehicle volume comprising two wheelers, this provides an opportune moment for Proton to capture the market potential for motorcyclists upgrading to small cars, given the long delay in owning a Tata Nano due to heavy demand.”

On another note, Syed Zainal said Proton was in talks with various global original equipment manufacturers, including Volkswagen, to form strategic collaborations.

“We spoke with Volkswagen in Geneva and discussions are under way on how we can collaborate,” he said, without elaborating.

Meanwhile, Syed Zainal said Proton had yet to finalise a sales target for the year. The company sold 148,031 units in 2009. “We are finalising the number but we can assure you it will be much better than what we previously did. Since 2006, our domestic volume has increased.”

Separately, Syed Zainal said Proton was targeting to sell 4,000 units of Persona Elegance a month.

He said Persona, the second best-selling model after Proton Saga, had maintained an average monthly sales of 3,600 units.

Syed Zainal added that since its launch in August 2007, 102,914 units of Persona had been registered, with another 6,898 bookings recorded as at February this year.


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