Proton needs 'more time' for foreign alliances

] shareholders who are betting on foreign alliances to improve the automaker's prospects need to remain patient for the wish to come true.

Proton Holdings managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said the national carmaker needed more time to search for strategic partners.

"It (search for strategic partner) is still progressing. I'm sure you're frustrated that it is not happening quickly," Syed Zainal. "But I assure you it is in the mind of everybody. Give us some time."

On the talks with Volkswagen AG (VW), Syed Zainal said discussions were "underway". "There is always hope for Proton. The search for collaboration is always there," he told the media after the launch of Persona Elegance 1.6 litre sedan on Thursday, March 18.

This is the fourth time that Proton has had partnership talks with the Germany carmaker. Market expectation has it that any partnership formed between the two parties would probably be a technical alliance, and perhaps contract manufacturing since VW needs production facilities for the Asean market.

Proton surged to RM4.56 — the highest since November 2009 — last week. It closed at RM4.38 on Thursday. Dealers attributed the surge on renewed speculation that it was nearing conclusion to a foreign partnership.

In India, Syed Zainal said it might announce more details of its expansion there in the second half of its year ending March 31, 2011 (FY11).

"We had announced the appointment of (Behara Venkata Rama Subbu) as director of the board. This will give you a very clear indication that we are very serious about what we are going to do in India, because he is a very strong personality with a lot of experience there," he said.

Subbu, an Indian national, was appointed on March 1. He had previously helmed Hyundai Motors India and acted in an advisory capacity in several car companies in India.

Meanwhile, Syed Zainal expects the newly launched Persona Elegance 1.6 litre sedan to boost overall Proton car sales by 8% in FY11.

"The introduction of the Persona Elegance is expected to increase monthly sales of the Persona to at least 4,000 units and contribute 48,000 to be sold over the next 12-month period, representing an 11% increase over the last 12 months' performance," he said.

With a monthly average sales of 3,600 units, Proton said 102,914 units of the Persona have been sold since August 2007. As at February 2010, there have been 6,898 bookings.

The new model will replace the Persona SE, the mid-sized sedan model which currently holds a 35% market share of cars in its class, according to Proton.

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