Honda May Share Platforms, Facilities With Malaysia’s Proton

Honda Motor Co. (7267), Japan’s third- largest automaker, may share car platforms and production facilities with Malaysian national carmaker Proton Holdings Bhd.

The companies signed an agreement yesterday and will also explore opportunities to collaborate in technology and new product line-up, according to a Kuala Lumpur stock exchange filing by Proton’s parent, DRB-Hicom Bhd. (DRB)

“Having a strong and renowned global automotive player like Honda Motor as the foreign strategic partner to Proton will provide the group with the opportunity to grow as an original equipment manufacturer,” DRB said in the statement. “The opportunities are endless.”

Honda already produces cars in Malaysia, including CR-V sports utility vehicles. For Proton, the deal may provide access to technology that could help it boost exports, after holding unsuccessful alliance talks with Volkswagen AG and Peugeot SA.

DRB, an autos-to-property group controlled by billionaire Syed Mokhtar Al-Bukhary, wants to bolster Proton after taking over the Malaysian carmaker this year.

DRB’s shares jumped as much as 5.3 percent to 2.60 ringgit in Kuala Lumpur trading yesterday, the highest intraday level since Aug. 24, after Business Times reported Proton may sign a strategic partnership with an unnamed Japanese carmaker. The stock later pared gains to close at 2.53 ringgit before the announcement, having risen 24 percent this year. The benchmark FTSE Bursa Malaysia KLCI Index is up 9.3 percent this year.

The agreement “indicates DRB’s commitment and initiative in restructuring Proton and turning it around with strategic partnership,” Daniel Wong, an analyst at Hong Leong Financial Group Bhd., wrote in a report yesterday, ahead of the statement. “We strongly believe that DRB is taking swift actions in integrating newly acquired Proton and contributing positively to the group.”

Proton, set up by former Prime Minister Mahathir Mohamad in 1983 to steer the Southeast Asian nation’s industrialization plan, owns unprofitable British sports-car maker Lotus Group International Ltd. and has been struggling to compete with rivals including Toyota Motor Corp.

To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho in Tokyo at ycho2@bloomberg.net

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