Proton reins in Colt

MITSUBISHI and Proton have announced an expansion of their long-running alliance that could see the production of a new Proton small car based on the forthcoming Mitsubishi Colt replacement.

The plan would also see Proton build complete vehicles for Mitsubishi and jointly produce engines for use by both companies.

Mitsubishi will in return help fast-track the development of Proton hybrid and electric vehicles by providing its Malaysian partner with vital vehicle technology.

The two car-makers announced last week the likely areas of collaboration in future as a result of feasibility studies that commenced late last year, but said the joint-venture details would not be finalised for another two months.

It heralded “joint production of engines in Malaysia” and “consignment production of MMC-brand vehicles at Proton facilities” as key planks of the collaboration, but of more global significance is major component sharing on the forthcoming global small cars and eco vehicles.

Proton Holdings managing director Syed Zainal told a press conference after the group’s AGM on Thursday that the two companies were in “serious discussion for strategic collaboration” that would strengthen the competitiveness of both companies globally.

“The collaboration will also see the sharing of major parts and components between MMC’s ‘Global Small’ car, which is to be launched next March starting in Thailand, and Proton’s upcoming ‘Global Small’ car and also provision of MMC’s future technologies such as electric, plug-in hybrid and hybrid vehicle technology,” he said.

“This joint investment will help Proton reduce development cost and time, thus minimising our investment.”

However, Mr Zainal said the collaboration did not involve equity exchange.

Mitsubishi was once a major shareholder in the government-owned Proton but sold its 15.86 per cent stake in 2004 when the Japanese conglomerate restructured in the wake of the Asian financial meltdown.

That sell-off ended a 20-year association that began with the creation of Malaysia’s first car (the Saga) in 1985 and included the production of numerous superseded Mitsubishi models as Protons, but little provision of new technology.

Soon after the Mitsubishi deal ended, Proton announced a tie-up with VW, but it was never signed off and was eventually abandoned in November 2007.

With Japanese car-makers seeking new alliances in the region to offset the strong yen and competition from rising Asian rivals, Mitsubishi signed a new agreement with Proton in December 2008 to develop and build vehicles in Malaysia. The first result was the Inspira four-door sedan, which replaced the Waja in 2010 and is essentially a rebadged Lancer.

“The latest discussion between the companies aims to provide yet another win-win relationship where MMC will be able to expand its presence in the ASEAN market while Proton will be able to also expand its line-up and make effective use of its production facilities,” said a joint statement.

“A new strategic collaboration, supported by the growth of both companies since their first collaboration 26 years ago, is certainly a natural progression for both parties in taking their business relationship to a much more significant and impactful level in view of the ever competitive automotive landscape.”

Production of the Colt replacement – still known officially as the Mitsubishi ‘Global Small Car’ – will commence in Thailand in March next year.

Revealed in near-production form at the Geneva motor show six months ago, the all-new Colt is a conventional five-door, five-seat light car that will be built in Mitsubishi’s first new plant in 16 years.

It will initially be powered by 1.0 and 1.2-litre three-cylinder petrol engines, but about a year after launch the range is expected to be boosted by a turbocharged performance model and a full electric variant.

When it arrives in Australia next year, the born-again Colt will compete with not only the likes of the Toyota Yaris and Holden Barina, but also similarly Thai-built rivals such as the Nissan Micra, Ford Fiesta, Mazda2 and Honda Jazz.

Sales of the current-generation Colt – which has been in Australian showrooms since 2004 – have slowed to a trickle in the past two years, averaging only about 100 units a month.