PETALING JAYA: DRB-Hicom Bhd’s share price gained 3.81% or 9 sen to close at RM2.45 with 22.73 million shares done today, on news of a joint venture in China which will enable subsidiary Proton Holdings Bhd to assemble and market cars there.
This is DRB-Hicom’s highest gain since Aug 13, having closed at RM2.32 last Monday. The stock has been fluctuating since.
Proton Holdings and Zhejiang Geely Holding Group entered into a heads of agreement to set up an equal stake joint venture (JV) company which will enable Proton to assemble and market its cars in China.
DRB-Hicom said in a statement yetoday that the partnership via the yet to be named JV entity includes the setting up of a production facility in China which will assemble vehicles, and the development of a network of dealers to market the Proton range in China.
The portfolio of cars for China will primarily come from existing Geely platforms, although the external design of the vehicles will be undertaken by Proton. However, the agreement also provides for existing Proton platforms that are found suitable to be developed into models for the Chinese market.
DRB-Hicom Group managing director Datuk Seri Syed Faisal Albar said Geely’s entry as a strategic partner of Proton has paved an easier route for Proton’s entry into the lucrative Chinese market.
“Clearly with Geely on board, Proton’s route into China has become more tenable. Part of Geely’s role is to secure the manufacturing licences and regulatory approvals required for such a venture under China’s regulations. Geely will also identify a suitable location where the manufacturing facility is to be based”, he added.
Existing Proton component vendors that have quality and a competitive edge may also be considered as suppliers for the JV company. This, Syed Faisal said, should sit well with the Malaysian government which has often prodded Malaysian component makers to venture into the Chinese market.
China’s passenger car sales have grown tremendously over the last 10 years—from the sale of 6.76 million passenger cars in 2008 to 24 million units in 2017. Geely is seen as the clear leader in the segment, as the first privately-owned Chinese carmaker to sell over one million units.
Source: The Sun Daily