Ever since the announcement of the ‘Heads of Agreement’ between Geely and Proton, some media outlets have been postulating the notion that Proton could become what a Dacia is to Renault or even a Skoda is to Volkswagen. But is it so straightforward?
First off, a ‘heads of agreement’ is a non-binding agreement, it is by no means a certainty that this yet-to-be-named joint venture company will be set up, let alone a factory and a network of dealerships in China. Much will depend on the feasibility studies to be undertaken and whether consumers in China regard the Proton brand as appealing, and if not, would it even be called Proton? As it stands, the Chinese auto market, while huge in scale, is already saturated with local manufacturers.
The official release goes on to say, “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 themselves. However, the agreement also provides for existing PROTON platforms that are found suitable to be developed into models for the Chinese market.”.
One then must ask: what can Proton bring to the table that Geely doesn’t already have in its home market? While Proton designs are not unattractive, we are hardly a Pininfarina or Giugiaro. To market vehicles based on current Proton platforms means converting newer models such as the Persona and Iriz to left-hand drive, while older ones would have to be made to comply with current safety regulations in China. There’s even a China NCAP these days if you haven’t noticed.
Suffice to say, it’ll be interesting to see how the JV company intends to position the Proton brand (if it is called that) in China and within the Geely stable for other markets. Whichever the case, the upside is that even a small share in a gigantic market like China would raise Proton’s numbers considerably, this alongside the slower-burn right-hand drive regional strategy could well be the way forward for Proton. The JV in China is expected to be incorporated within the first half of 2019, subject to regulatory approvals.