This article first appeared in The Edge Financial Daily on June 26, 2018

PETALING JAYA: Prime Minister (PM) Tun Dr Mahathir Mohamad wants to rope in car parts manufacturers from China to join hands with local manufacturers in order to help improve Malaysia’s manufacturing capabilities.

The prime minister said he had spoken to Li Shufu, the chairman of Proton Holdings Bhd’s 49.9% shareholder Zhejiang Geely Holding Group Co Ltd, with regard to the idea.

“He (Li) asked me what is it that Malaysia wants. So, I explained to him that Proton may be managed by Geely, but we want Malaysians to participate in the supply of [car] components et cetera.

“To upgrade Malaysian manufacturers, we want him to bring in manufacturers from China to [form] joint ventures [with Malaysian manufacturers] to help [them]… So, [Li] agreed,” Dr Mahathir told a news conference.

Geely leads one of the biggest auto groups in the world, with stakes in Mercedes and Volvo.

The participation of Geely in Proton would open doors for Malaysian car parts manufacturers to supply parts not only to the local market but the overseas markets — if production quality is up to par.

Amid a changing market environment, Dr Mahathir said it is “not fair” if Malaysian car parts manufacturers close down if they fail to upgrade themselves, as Geely may then bring in parts from other countries.

Dr Mahathir met with top officials of Geely and DRB-Hicom Bhd chief executive officer Datuk Seri Syed Faisal Albar Syed Ali Rethza Albar last Friday. DRB-Hicom holds a 50.1% stake in Proton.

Geely came into Proton in June 2017 as a foreign strategic partner, as part of DRB-Hicom’s plan to turn around the ailing automaker. DRB-Hicom has given Geely the driver’s seat in terms of management control of production and manufacturing operations at Proton.