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. Last Updated: 07/27/2016

Malaysians Mulling Auto Plant

bloombergMalaysian carmaker Proton says it is considering assembling cars in Russia.
Malaysian national carmaker Proton is considering an assembly plant in Russia as part of an effort to increase exports, a company executive said Thursday.

The plant would mark a comeback for the carmaker, which last sold cars in Russia in the early years of the decade.

Proton is in the early stages of planning the project, weighing whether to build the plant from scratch or to manage the assembly through a joint venture.

"We can go on a green field project, which will cost a lot of money, or we can set up a joint venture," Khaw Poh Aun, head of international business at Proton, said by telephone from Shah Alam, Malaysia. "It's a question of finding the right partner."

The company will give more information on the plant within the next three months, he said.

First, however, Proton is likely to try selling a small amount of cars in Russia to test the market, Khaw said.

Recently, media have reported that Malaysia is already preparing to export a few thousand Protons in a barter deal for Sukhoi jets.

Talk of a Russian plant comes at a time when Proton is trying to increase the number of cars its sells abroad. The company is aiming to export at least 100,000 vehicles a year by 2008, almost six times as many as it exported last year.

It currently sells cars in 18 countries but is planning to expand its sales to a total of 36 countries by the end of 2005.

Khaw said Proton would first test the Russian market with the limited import of its Waja sedan model and the Gen-2 hatchback. Proton is currently in talks with a distributor, he added.

"We will be there by the first quarter of next year," Haris Fadzilah Hassan, Proton's head of strategic planning, said in an interview that was published in Malaysia's Business Times on Wednesday.

Proton is also looking into production in China, according to the newspaper report. The carmaker already has an assembly plant in Iran, as well as a plant operated with a partner in Indonesia.

Proton came into being in the early 1980s under a government plan to give Malaysia its first automotive manufacturer, with Mitsubishi as a partner.

Vyacheslav Smolyaninov, an automotive analyst with the UralSib investment bank was skeptical about Proton's expansion plan. "They would need to exert colossal marketing efforts to deliver this make to a consumer," he said.