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China’s Geely moves on Proton, Lotus

Going Chinese: Proton’s Suprima has hardly set the Australian market alight, but it might in future by the time China’s Geely has given it a lift.

Proton acquisition by Geely may prove to be another win for DSI’s Aussie engineers

25 May 2017

AUSTRALIAN-based automotive transmission developer DSI (Drive Systems International) might be a winner from Chinese parent company Zhejiang Geely Holding Group’s investment in Malaysian car-maker Proton.

Potentially, DSI transmissions engineered at the company’s Springvale tech centre in Melbourne might end up in Proton cars under a revamp of the ailing Malaysian company’s product portfolio by Geely, which overnight announced that it would acquire a 49.9 per cent slice of Proton, along with a 51.1 per cent share of Proton-owned British sportscar-maker Lotus from July.

Proton and Lotus are set to join Zhejiang Geely’s rapidly expanding stable of automotive brands that already include Geely Automotive, Volvo, London Taxi and fledgling global prestige brand Lynk & Co.

The Chinese company plans to develop Proton as its beachhead in the growing ASEAN car market that, until now, has largely eluded Chinese manufacturers, while the Lotus purchase is seen as opening the door to sophisticated light-weight composite construction technologies that it plans to use across its multiple brands.

Because Proton is primarily a right-hand-drive car company, Geely reportedly sees the move as a logical way to access markets such as Australia and New Zealand.

Geely dipped a toe in the Australian market via Perth-based Chinese Automotive Importers a few years ago, but its inferior products at that time failed to catch on in the test market in Western Australia.

While Chinese takeovers often solicit concern in world markets, the latest Geely moves have been warmly welcomed in both Malaysia and Britain where pundits have been reassured by Geely’s sensitive renovation of Volvo into a fresh global force with a massive injection of cash after buying the Gothenburg-based company from Ford in 2009.

The Volvo acquisition has proved a masterstroke for Geely’s own automotive products, delivering world-class platforms, powertrains and safety technologies developed in Sweden to be shared across its brands to help it meet increasingly stringent safety and emissions standards while lifting engineering standards to world-class levels.

Along with its auto brand acquisitions, Geely bought Australian automotive transmission company DSI in 2009. While it closed DSI’s factory at Albury and switched manufacturing to China, it has retained the engineering operation in Melbourne.

The latest Geely model to benefit from DSI technology is a six-seat people-mover shown at the recent Shanghai motor show ahead of it market roll-out in China.

The transmission is said to be a seven-speed dual-clutch automatic developed in house.

In China, torque converter DSI transmissions are fitted to Geely, Haval and London Taxis.

With a policy of spreading technologies developed by its subsidiaries across its brands, it seems entirely possibly that DSI automatic transmissions developed and calibrated in Australia and made in China will end up on next-generation Proton cars to replace models such as the Suprima small hatchback and Exora small wagon that are both sold in Australia, albeit in tiny numbers. So far this year, Proton has sold just 11 cars in Australia, making the brand all but invisible.

A former state-owned company that was supposed to put Malaysia on the world automotive manufacturing map, Proton has struggled outside its homeland. Even in Malaysia, its market share has slumped from 74 per cent to just 15 per cent as superior cars manufactured by mainly Japanese rivals have wooed buyers.

Reuters reports that Geely had wanted to buy 51 per cent of Proton so it could have control of the company’s destiny but that the Malaysian government would only permit 49.9 per cent.

However, Geely’s access to first-world automotive technologies should ensure that it can dominate discussions on future Proton products, for which it will be responsible for the design, engineering and manufacturing,Current Proton owner DRB-HICOM will remain in charge of distribution and marketing.

In the ASEAN region, Geely’s Chinese SAIC Motor has been making a major play for market share under its MG brand, entering into a joint-venture manufacturing operation in Thailand.

While Geely clearly wants access to high-end Lotus technologies, the UK manufacturer could also benefit from items such as Volvo’s turbocharged petrol engines.

Lotus cars currently employ Toyota-sourced four-cylinder and V6 engines, but with Volvo’s in-house-developed four-cylinder engines replacing Ford-sourced powertrains, a switch seems logical.

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