Sindhu Bhattacharya

New Delhi: Malaysian car maker Proton’s nowon, now-off India strategy is yet again being fine-tuned. After unsuccessful talks with several Indian vehicle makers, including International Cars & Motors (Sonalika Group) and Hindustan Motors, Proton may now be veering around to the view that separate manufacturing and marketing distribution alliances would work better for this market.

This is perhaps the reason for the Malaysian company opening discussions again with a fresh set of Indian companies.

Our sources tell us that Proton has been talking to Argentum Motors for getting its vehicles contract-manufactured in India. Argentum has been copromoted by B V R Subbu and Ajay Singh and has facilities for making complete vehicles as well as powertrains at Surajpur (Haryana). Proton’s thinking here may well be to get vehicles manufactured to its specification without having to invest significant amounts of money in putting up a manufacturing facility all by itself.

Asked if he was in Malaysia last week finalising a contract with Proton, Subbu told DNA Money, “I am in India, what talks are you talking about?”

Despite repeated attempts over the last several days, Proton officials chose not to make any comment regarding the company’s India plans.

Sources also point out that Proton has held discussions with two other Indian automobile majors - Mahindra & Mahindra and the Hero Group - for marketing and distribution of its cars but this could not be confirmed.

Proton is a government-owned company and though its vehicles are considered high-end, quality and finishing issues remain. Not only is the company been losing sales in the home market, it is also plagued by very high cost per car, say dealers.

A long-time Proton dealer avers that the company is “rather slow in decision making since it is government run. It is also plagued by very high cost per car because there are no economies of scale”.

He says Proton has its own manufacturing facility only in the home country and assembly units in Indonesia and Iran.

“Proton supplies CKD to all other global operations...no wonder it is hesitating over whether to set up a full-fledged facility in India or get vehicles contract manufactured,” the dealer said.

But despite having low production volumes, Proton has access to some of the latest vehicle technology through its acquisition of British marquee Lotus Technologies some years back. Some of its popular models include ‘Saga’ and ‘Wira’ sedans, ‘Satria’ or the Proton Compact and ‘Putra’ sporty coupe.

Source : DNA