The establishment of Proton and the National Car project was to boost development of the local auto industry and move it further up on the regional, if not global arena. Initially funded and protected by the government to enable it to grow quickly, Proton has fulfilled its mission in many ways over almost 4 decades. And even after being ‘privatised’ in the 1990s, it has continued to play its part in developing the auto industry.
Local production of parts has been high on the list of objectives by the government, with the local content requirement from the early years of local assembly having been a major incentive for carmakers to encourage the establishment of local vendors with collaborations in many cases. Some of these vendors have also gone on to become regional suppliers for other carmakers.
Tier 1 auto parts vendor
The latest development in this area is Proton’s collaboration – via its subsidiary, Advance Vehicle Engineering Global Sdn Bhd (AVEE Global) – with AAPICO Hitech Public Company Limited (Aapico), one of Thailand’s largest auto parts companies and a Tier 1 global supplier. The collaboration will see Aapico acquiring 60% of AVEE Global from Proton which will retain the remainder in the company renamed as Aapico Avee Sdn. Bhd. AVEE Global was originally established as Miyazu Malaysia in 2003 before being acquired by Proton.
“The joint venture with Aapico will benefit PROTON by helping to provide the company better cost optimization, efficiency, and quality in the production of our cars. As our volume increases in tandem with our model introduction plans, we will continue to work to ensure our products are on par with the competition in terms features and quality while continuing to offer outstanding safety from the use of technologies such as hot press forming,” said Dr Li Chunrong, CEO of Proton.
Aapico will make an initial investment of RM40 million into Aapico AVEE’s 20-acre facility in Tg. Malim, Perak where Proton also has its factory. Another RM100 million in investment is planned for 2024 to carry out plant extensions and the acquisition of new machinery for producing dies, jigs, hot stamping parts, body assembled parts and chassis components. These will cater not only for Proton but also other assemblers.
Aapico to manage operations
The operational manufacturing facility will soon be ramping up its production volume with new products in the pipeline. Bringing its vast experience and expertise developed over 27 years, Aapico will be managing operations and introducing new technology applications to produce better quality parts, improve production and cost efficiency. The future expansion will also see the development of human capital with more jobs being created and attracting highly skilled talents to the country.
“Aapico is taking the opportunity to enter the auto parts manufacturing sector in Malaysia at this right time, with promising growth expected in the automotive industry led by strong demand for Proton vehicles and further supported by strong economic growth. We aim to bring our expertise and manufacturing technology into the partnership and deliver world class auto parts to Proton and support their expansion plans in both the domestic and export market,” said Yeap Swee Chuan, President & CEO of Aapico Hitech.
Second joint venture for Aapico in Malaysia
The Aapico-Proton strategic partnership is Aapico’s second venture in Malaysia’s auto parts sector. Earlier this year, the Thai company signed a joint venture agreement with Purem, one of the largest exhaust systems suppliers globally. With a RM30 million initial investment, Aapico holds 49% ownership while Purem holds 51% of Purem Aapico Sdn Bhd, which will produce exhaust systems and will begin supply to Proton from the third quarter of 2023.
“We hope that these initial two investments will be the start of our long-term partnership with the national carmaker as we play a small part to support Proton’s role as a catalyst for developing the country’s automotive ecosystem,” said Mr. Yeap, who is Malaysian and began his business venture in Thailand in 1985.
