Proton goes back to Mitsubishi

The Malaysian maker has been searching for a 'big brother' for more than three years and has finally gone back where it began, linking to the Japanese company which helped to establish Proton in the 1980s.

It is a product connection with benefits on both sides, as Mitsubishi gets access to Proton's small cars and factory in Malaysia and its renewed partner can tap into a Japanese source for larger, semi-luxury cars.

The new deal has only just been completed and and details are being kept secret.

"It's too early to be saying anything. These are long-term model plans which obviously need to stay confidential," says the CEO of Proton Cars Australia, John Startari.

Proton originally intended to create a strategic partnership with Volkswagen for Asia but, when that plan floundered off the back of political infighting in Malaysia, it spoke to many other companies including Peugeot, Fiat and — through Holden — General Motors.

It eventually settled on a deal with Mitsubishi as it prepares to spend more than $1.8 billion over the next five years on future models.

"It's good news. It secures a technology partner for Proton," says Startari.

"It's also a company that Proton knows well and is a strong and credible partner."

Proton is likely to do the work for a shared city car, which would become the replacement for its current Savvy, with Mitsubishi lining up a replacement for the Waja which could be based on its new Lancer.

The Malaysian company also plans to tap Mitsubishi's experience to improve its quality and design vehicles which will be more acceptable outside its home country.

While the deal is an obvious win for Proton, Startari says the company is doing surprisingly well despite poor sales in Australia.

"Proton is one of the few companies anywhere in the world that's making a profit right now," he says.

While Proton is struggling for cut-through in Australia, it is pushing ahead with new-model plans including its first people mover. It is about to go into production in Malaysia but local demand will delay its arrival downunder.

"We will definitely be getting the MPV, but it won't be coming until 2010," says Startari.