Proton wants to be top-3 in SEA, not possible with just the Tanjung Malim plant

Eric · Jul 13, 2021 12:45 PM

Proton wants to be top-3 in SEA, not possible with just the Tanjung Malim plant 01

Recently, rumours surfaced from Thailand automotive portals claiming that Geely are in talks with Thailand’s Board of Investment (BoI) to set up a new factory.

We reached out to Geely for clarification and the Hangzhou-based company responded by saying that there’s no truth to that.

Proton wants to be top-3 in SEA, not possible with just the Tanjung Malim plant 02

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While the rumour has been squashed by Geely, expect market talks of Proton doing CKD operations in Thailand and Indonesia to intensify in the coming years, because there is no other way to get around both countries' import tax barrier.

Proton wants to be top-3 in SEA, not possible with just the Tanjung Malim plant 01

Without CKD operations in Thailand and Indonesia, it won’t be possible for both Proton and Geely to achieve their lofty 400,000-unit export target that was announced back in 2019.

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The Haval H6 will be a tough rival to the Proton X70

Take Thailand for example. Without local assembly, the imported Proton X70 cannot be priced competitively against rivals like the Haval H6, MG HS, and Honda CR-V – all of which are manufactured in Thailand.

Proton wants to be top-3 in SEA, not possible with just the Tanjung Malim plant 03

Indonesia takes it a bit further, as they are very protective of their local manufacturing industry. The archipelago does it by limiting the import of cars to roughly 100,000 units a year. With this import cap in place, Proton cannot expect its sale to be any better than the Perodua Myvi, which is sold there as the Daihatsu Sirion and is capped to roughly 3,000 units annually.

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The Wuling Almaz is a very popular Chinese SUV that is built in Indonesia

For Proton to be competitive in markets such as Thailand and Indonesia, local assembly in those countries are definitely needed. We understand that there have been no submissions made to Thailand or Indonesia as yet, hinting that CKD may not happen so soon.

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MG sold 824 units of the CBU China ZS EV in Thailand last year

The interim solution is to rely on the ASEAN-China Free Trade Agreement. Under the ASEAN-China Free Trade Agreement, Geely can import battery electric vehicle (BEVs) into Thailand without incurring any tax. Last year, roughly 1,000 EVs were sold in Thailand.

Over the next couple of years, Proton’s ageing Shah Alam plant will be closed down and production work will be concentrated in Tanjung Malim.

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Proton has a CKD operation in Kenya responsible for assembling the Proton Saga

At the moment, Proton has several plants outside of Malaysia responsible for local assembly, including in Pakistan and Kenya. Thus, it’s not too far-fetched for Proton to set up plants in Thailand and Indonesia in an effort to boost its export numbers.

Also Read: CKD production of Proton Saga begins in Kenya

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Eric

Editor

Started from the IT industry but somehow managed to find his way into the automotive industry. If he’s not gaming, he’s constantly tinkering with his daily/weekend car.

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