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Mitsu eyes Malaysia despite Proton/PSA talks

Exporter: Mistubsihi hopes to sell a 2.4-litre 380 to Malaysia.

Mitsubishi says Proton talks with Peugeot-Citroen don't end its export hopes

3 Oct 2006

ALLIANCE talks between Proton and PSA Peugeot Citroen have not scuppered plans by Mitsubishi Australia to export 380s to Malaysia.

The Adelaide manufacturer is still confident that even if the Proton-PSA deal goes through, there will be room in the alliance for the 380 in Malaysia.

Mitsubishi president and chief executive officer, Rob McEniry, said the Proton-380 talks were still in play but admitted they had slowed.

However, he denied that they had been put on the back burner, subject to an approval for the Peugeot-Proton deal, saying the 380 deal was one tenet of the alliance talks.

Mitsubishi Adelaide has already done quite a deal of "official and unofficial development" on the Proton version of the 380 and was ready to start exports.

Mr McEniry said it was difficult to put a time-line on when 380 exports would start to Malaysia.

However, he did not rule out exports starting as soon as this year.

"The problem with those things is that you don’t know," he said.

"They’ve (Proton) been down we’ve talked to suppliers about having some components changed – like the logos and badges – we’ve got that ready to go.

"Simple things but important."Mr McEniry said there were synergies to a Peugeot-Proton tie up that could also benefit Mitsubishi’s plans to sell the 380 in Malaysia.

"If it were to come to pass the likely scenario would be that it would come in three stages," he said.

"Fully built up, SKD (semi-knocked down) and CKD (completely knocked down).

"CKD would be things like body-in-white cars.

"As you know Malaysia – until there is a free trade agreement with them - still has a local content requirement.

"They also have fairly punitive taxes on larger displacement engines."By offering SKD or CKD kits the 380 could bypass some of the heavy automotive tariff regimes in place in Malaysia.

21 center imageLeft: Mitsubishi 380

However, this would also mean that exports of fully built up 380 V6 would be limited as it would attract high import tariffs. The fully built up versions however, would be targeted to the high-end government chauffeur driven segment of the Malaysian market.

"Then they’d be looking at doing a four cylinder for their local market and that’s where SKD and CKD come into play," Mr McEniry said.

"So the volumes would be pretty low for a V6 – 500 to 1000 – but in total it could be as many as 15,000 cars annually."Mr McEniry said if Proton wanted a Malaysian 380 four-cylinder, it would provide the conduit for doing a four-cylinder car for Australia.

However, he was cognisant of Toyota’s recent experience with the Camry and the fact that its four-cylinder Camry had much the same fuel consumption as the V6 Aurion.

If Mitsubishi went down the four-cylinder road for 380, it would need to have significant gains in fuel economy without trading off performance in the heavier car.

Proton and PSA Peugeot-Citroen signed a letter of intent early last month to evaluate and study a possible co-operation.

The evaluation, which will end on January 1, focuses on product development, manufacturing, distribution, contract assembly, vendor development and quality improvement.

Although Proton aims to "leverage the technological expertise of a major global automobile manufacturer", it said the French company expects to increase sales of its Peugeot and Citroen vehicles in Malaysia.

GoAuto understands the deal could mean Proton manufacturing 307 hatches and wagons for the South-East Asian market, including possibly Australia.

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