Proton appears ready to join the fray to produce and compete in the energy efficient vehicle (EEV) market, with a planned production of a hybrid model. — Bloomberg photo
KUCHING: DRB Hicom Bhd’s (DRB Hicom) subsidiary Proton appears ready to join the fray to produce and compete in the energy efficient vehicle (EEV) market, with a planned production of a hybrid model.
AmResearch Sdn Bhd (AmResearch) stated in its report that, “We are of the view that this will ensure that Proton does not lose out on the incentives under national automotive policy (NAP), particularly for the higher segments, while bracing itself for further liberalisation of the industry and an accompanying gradual decline in retail prices pursuant to the NAP.”
The research house noted apart from Lotus, its subsidiary Composite Technology Research Malaysia Sdn Bhd (CTRM) will play a key part in its planned production of EEVs.
Group managing director Tan Sri Mohd Khamil Jamil has said in a media report that composite materials would play a major role as they could reduce a vehicle’s weight by 20 per cent while maintaining the tensile strength.
He noted that “certain parts could be manufactured to reduce weight while still maintaining the rigidity of the body panels”.
CTRM currently derives about 90 per cent of its revenue from the manufacturing of aircraft composites at its plant in Batu Berendam, Malacca.
CTRM has an outstanding order book of RM5.68 billion, which would keep it busy until 2020, with Airbus and Boeing being its main customers.
DRB Hicom bought CTRM in November last year for RM298 million in a deal with the Ministry of Finance. Proton will continue to receive R&D grants from the government.
Currently, Proton is the only player that conducts R&D on a large scale in the country. It also has an R&D centre at its Lotus facility in the UK, which includes one of the biggest styling studios in the world.
In the meantime, it was also reported that Proton is slated to introduce its planned global small car – codenamed P2- 30A, the first complete new creation since the takeover by DRB-Hicom two years ago.
As long as it fulfills the fuel consumption requirements of the NAP, Proton would be able to garner incentives from the government.
It would produce circa 60,000 units per annum of the global small car in the initial stage. The Tanjung Malim plant’s capacity would be increased to 210,000 cars per annum.
Positively too, DRB-Hicom’s 34 per cent associate Honda Malaysia aims to be the number one hybrid hub in Asia-Oceania by 2016.
“Honda Malaysia last week launched the country’s first hybrid facility – a RM382 million second production line at its Pegoh plant in Malacca, which will assemble small models and hybrid vehicles for regional markets, including Southeast Asia, Australia and New Zealand,” the research house pointed out, while also highlighting that recently Honda Malaysia will double its production capacity to 100,000 units, producing some 400 units a day, as opposed to 200 units now.
“It targets sales of 76,000 units and 78,000 units for 2014 and 2015, respectively, vs 51, 546 units last year,” it explained.
Currently, Honda Malaysia assembles the City, Civic, CR-V, Accord and both the Jazz Petrol and Hybrid variants at the Pegoh plant. It is also targeting to enhance the localisation of the component parts to over 70 per cent in the near future from 30 per cent to 40 per cent currently.
Other than its associate stake in Honda Malaysia, DRB-Hicom itself also makes vehicles for VW and Mercedes- Benz – both of which could benefit from the NAP as well.
Additionally, DRB-Hicom’s unit Puspakom Sdn Bhd currently holds the concession to undertake mandatory inspections of commercial vehicles.
“As we have noted, it is expected to benefit from the proposal under the NAP that passenger vehicles be made to undergo inspections as well. The policy will initially make it a voluntary exercise before being made compulsory.”
DRB-Hicom holds an 81 per cent stake in Motosikal Dan Enjin Nasional Sdn Bhd (Modenas), while technology partner Kawasaki Heavy Industries holds the remaining 19 per cent stake. Modenas motorcycles are distributed by its wholly-owned subsidiary, Edaran Modenas Sdn Bhd (EMOS).
From the latest available data, Modenas’ FY13 sales volume fell 4 per cent to 56,291 units from 58,622 units in FY12.