Prospects of Renault being Proton's partner

French carmaker Renault SA, instead of Germany's Volkswagen AG, could end up being the technical partner of Proton Holdings Bhd, a research house has suggested.

AmResearch Sdn Bhd said its meeting with Renault Malaysia and related parties last month appeared to indicate the French carmaker's keeness to expand its presence in Malaysia and the Asean region.

"But it prefers a local partner to share its investment risk,"AmResearch said.

The research house did not rule out the possibility of Proton having further talks with Volkswagen, but felt that any such negotiations would be too lopsided against Proton.

"We think talks will involve smaller European carmakers with minimal manufacturing, market, and research and development (R&D) exposure in Asia, leading us to believe Renault is a likely suitor," it said in a recent report.
In April, Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said the national carmaker was in very preliminary technical collaboration talks with Renault, an affiliate of Nissan Motor Co.

Industry observers had said then that the talks were focused on the supply of a diesel engine and probably joint development of the Perdana replacement.

Renault, France's second largest carmaker, does not have its own assembly plant in the region and has very little exposure to the Asian market, AmResearch noted.

Passenger models are fully imported from France and the sales volume here is small, it said.

Renault, however, has a local partner in Tan Chong Motor Holdings Bhd.

Tan Chong, which assembles, markets and sells Nissan cars here, also holds the local Renault franchise through wholly-owned TC Euro Cars Sdn Bhd.

AmResearch said Proton's appeal lay in its advanced, underutilised manufacturing plant as well as comprehensive distribution and after-sales network. Its Middle East exposure and strategic importance to the government further enhance its appeal.

"In the case of a partnership, a structure similar to previous VW talks, i.e. stakes at manufacturing and R&D level, could be adopted rather than outright stake sale at Proton holding level," AmResearch said