Automobile giant Zhejiang Geely Holding Group is poised to expand its presence in the Southeast Asian car market, as it prepares to bid for a strategic partnership with Malaysian carmaker Proton Holdings Bhd, according to media reports.
Geely, which also owns Sweden's Volvo Car Group, is expected to submit the bid as early as this week, in which Geely is expected to offer Proton some of its latest technologies developed with Volvo, Reuters reported on Monday, citing two unidentified sources. The sources said that Geely is seeking a stake of at least 51 percent in Proton.
Yang Xueliang, a spokesman for Geely, on Tuesday did not deny or confirm news of the bid. "There is no information that needs to be disclosed to the public yet," he told the Global Times.
Reuters reported that other potential bidders for Proton include French carmakers Groupe PSA and Renault SA and Japan's Suzuki Motor Corp. But DRB-HICOM, the Malaysian conglomerate that owns Proton, said in a statement on Thursday that it has yet to select a foreign strategic partner and a decision could come in the first half of 2017.
Though more details of Geely's reported bid for Proton, the largest carmaker in Malaysia that also owns British sports car manufacturer Lotus, remain unclear, a potential win could give the Chinese automaker based in Hangzhou, East China's Zhejiang Province, the access to markets in the Association of Southeast Asian Nations (ASEAN), according to media reports.
The successful bidder will get access to a Proton assembly plant in Malaysia with annual production capacity of 150,000 units. That will qualify the bidder for duty-free shipments of cars anywhere among the 10 ASEAN countries with a combined population of 623 million, the South China Morning Post reported on February 3.
Through the reported bid for Proton, Geely is also looking to tap into the market for right-hand drive cars in Asia, where more than 8 million units are sold every year, the Financial Times reported on Monday, citing a source familiar with Geely's strategy.
Geely, which also owns The London Taxi Co, the maker of the iconic black cab, has been expanding its global business through merger and acquisition deals and plans to establish research and development centers in Europe and North America, according to the firm's website.
Geely is also doing well in the domestic market, where it sold more than 100,000 cars in January, a year-on-year increase of 71 percent, the company said on February 6.
Proton has been struggling in recent years with its market share in Malaysia down from its peak of 75 percent of all car sales to 15 percent in 2016, according to the Financial Times report.
