Proton to start production in RI

Proton to start production in RI

The Star/Asia News Network, Kuala Lumpur

PT Proton Tracoma Motors is expected to produce about 5,000 units of Wira cars this month, a source familiar with the deal said.

The Indonesian company, which is a 51:49 joint venture between Proton Holdings Bhd and auto parts supplier Tracoma Holdings Bhd, owns an assembly plant in Cikarang, east of Jakarta.

The source said the new cars would cater mainly for the taxi market in Indonesia, which has a huge potential due to the increasing demand for replacement of old taxis.

Prices of the cars were likely to be very competitive, he added.

PT Proton Edar Internasional Indonesia, a 95 percent-owned unit of Proton Edar Sdn Bhd, was already aggressively marketing the cars as well as beefing up its distributorship presence in the country, the source said.

The Indonesian plant, which is an important investment for Proton, takes advantage of the lower tariff arrangements under the ASEAN Free Trade Area.

The more competitively-priced Proton cars produced in Indonesia, compared with Malaysian-made units, are expected to be used to penetrate other Asean markets like the Philippines and Thailand.

For the first six months of operations, the Cikarang plant is expected to focus on the production of Wira for the Indonesian market, following which, it might expand the production to the GEN.2 and Arena models.

The Cikarang manufacturing facility has an estimated annual production capacity of 50,000 vehicles, which can be assembled for both domestic and export markets.

In light of the increasingly competitive domestic market, Proton had so far made several efforts to widen its revenue base. Last year, it bought a controlling stake in Italy-based MV Agusta Motor spa, the producer of MV Agusta, Cagiva and Husqvarna motorcycles.

The national car maker also formed a long-term strategic alliance with Volkswagen Aktiengesellschaft of Germany.

Proton is likely to see the results of its consolidation efforts this year.