GM Forms New Chevrolet Venture In Malaysia

Agreement with DRB-HICOM, the distributor of GM vehicles in Malaysia, explores making cars for Southeast Asia.

KUALA LUMPUR, Malaysia (AP) — General Motors Corp. on Tuesday tied up with Malaysia's DRB-HICOM Bhd. to explore making Chevrolets for Southeast Asia, but the U.S. auto firm still is interested in forming an alliance with national carmaker Proton, officials said.
Steve Carlisle, president of GM's Southeast Asia operations, said GM had made a broad proposal to the Malaysian government, including the possibilities of manufacturing Proton or GM cars or of cooperating on a new vehicle.
''Obviously, we would like to have an influential role in the company (Proton),'' Carlisle told reporters. He didn't give further details.
Money-losing Proton, which is 43 percent owned by state investment arm Khazanah Nasional, is searching for a foreign partner to curb dwindling sales and boost exports. Proton has been actively in talks with Germany's Volkswagen AG, which is considered the front-runner.
Gaining a stake in Proton could help GM — which already has operations in Thailand, South Korea, India and China — consolidate its position as a key player in Asia's booming automotive market, analysts have said.
The Malaysian government is expected to decide on a partner for Proton by the end of the year.
Local auto companies, DRB-HICOM among them, have also expressed interest in teaming up with the national car company.
DRB-HICOM Group Managing Director Mohamad Khamil Jamil said the company is still keen on a stake in Proton but has no plans to link up with GM on a bid. The Chevrolet venture was agreed upon much earlier and would not affect their Proton bid, he said.
DRB-HICOM, which is the distributor of GM vehicles in Malaysia, is aiming to manufacture its own cars within three to five years, he said.
Earlier, General Motors Asia Pacific Holdings LLC inked a pact with DRB-HICOM to form a joint venture, which is expected to begin operations in October. The GM unit will hold a 51 percent stake and DRB-HICOM the remaining 49 percent, they said in a joint statement.
Under the pact, the companies will ''explore the establishment of a local vehicle assembly program as well as a manufacturing hub for the production of Chevrolet vehicles, parts and accessories'' to be sold in the 10 countries making up the Association of Southeast Asian Nations.
''As the largest market for passenger cars in Southeast Asia and a key member of the ASEAN community, Malaysia is a country in which GM believes we must have a major presence,'' Carlisle said in the statement.
After signing the joint venture, the two companies launched the Chevrolet Aveo, a 1400cc sedan aimed at capturing the young executive market. A basic model costs 69,888 ringgit (US$19,968; euro14,620).
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam and comprises a community of 550 million people.
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