Malaysia's automobile industry has made remarkable progress and will further deepen cooperation with China in the future

[PCauto] Shortly after Proton's new electric vehicle (EV) factory was put into operation in the Tanjung Malim Automotive High-Tech Valley (AHTV) in Malaysia, Malaysian Prime Minister Datuk Seri Anwar Ibrahim stated that Malaysia's automotive industry has made significant progress by leveraging China's successful advantages in the EV sector through the long-term partnership between Proton and Geely.

The Proton EV factory is one of the achievements of this partnership

This factory showcases the deepening strategic partnership between Malaysia and China, particularly in technology transfer, EV innovation, and talent cultivation through vocational training.

Proton's brand-new EV factory is co-invested and built by Geely and the DRB-HICOM Group. It is not only Proton's first EV production base but also Malaysia's first entirely new EV manufacturing facility.

The factory initially has an annual production capacity of 20,000 units, with plans to expand to 45,000 units in the future. The total investment amounts to 82 million MYR.

The collaboration between Geely and Proton has a long history

The partnership between Geely and Proton began in 2017 when Geely acquired a 49.9% stake in Proton, becoming its exclusive foreign strategic partner.

This collaboration not only helped Proton achieve a turnaround from nine consecutive years of losses to securing the second-highest sales in the Malaysian market for consecutive years, but also injected momentum into Proton's electrification transformation.

In 2024, Proton will launch its first fully electric model, the e.MAS 7. This model is developed based on the Geely Galaxy E5 platform, but Proton emphasizes that it is not a simple rebranding effort but the result of joint development with Geely. It involved the design participation of 230 engineers and was localized with a right-hand drive version tailored for the Malaysian market.

After its release, the e.MAS 7 quickly became one of the best-selling electric vehicle in Malaysia and has already started production in a newly established factory.

The government is actively promoting the country's transition to electric vehicles

In recent years, the Malaysian government has vigorously promoted the development of the electric vehicle industry, designating it as a key project in the "2030 New Industrial Master Plan."

The government has introduced a series of incentive policies, including exemptions on import tax, excise tax, and sales tax for electric vehicles, as well as road tax reductions. These policies will remain in effect until the end of 2025.

Additionally, Malaysia plans to increase the share of electric vehicles to 15% of total sales by 2030 and further raise it to 38% by 2040.

These policies strongly support Geely and Proton's electric vehicle initiatives.

The collaboration between Proton and Geely is driving an upgrade of Malaysia's automotive supply chain

The AHTV project is one of the core projects under the Malaysian government's "Thirteenth Malaysia Plan" and aims to establish an intelligent automotive industry cluster that integrates research and development, production, and testing.

Geely's cooperation with the DRB-HICOM Group is not limited to vehicle manufacturing but also includes supply chain integration, technology development, and talent cultivation.

According to the plan, AHTV will achieve an annual production capacity of 500,000 vehicles by 2035, with 50% designated for export, supported by a supply chain system of 1 million components.

The commissioning of Proton's electric vehicle factory has not only enhanced Malaysia's local automobile manufacturing capability but also promoted the localization of the supply chain. Through the AHTV project, Geely aims to attract global component companies to set up operations, reducing Proton's supply chain costs (currently 30% higher than in China).

Chinese battery company EVE Energy has invested in building a cylindrical battery industrial park in Kedah, Malaysia. TELD has also partnered with local charging operators to deploy supercharging stations.

These initiatives will further enhance Malaysia's electric vehicle industry ecosystem.

The Southeast Asian Electric Vehicle Market is Experiencing Rapid Growth

Currently, the annual growth rate of the Southeast Asian electric vehicle market is 40%. Geely is capturing the Malaysian and ASEAN markets through Proton while covering high-end and mid-to-high-end segments with its Zeekr and smart brands.

With the in-depth advancement of the AHTV project, Geely and Proton plan to achieve annual sales of 310,000 units by 2030 (with an electric vehicle penetration rate of 25%); by 2035, further increasing to 500,000 units (with an electric vehicle penetration rate of 50%). Proton also plans to launch at least three new models within the next year , covering more market segments.

This ambitious plan will not only consolidate Proton's position in the Malaysian market but could also reshape the competitive landscape of the ASEAN new energy vehicle industry.

Anwar has repeatedly emphasized that the success of the Proton project is attributed to the joint support of both governments and hopes to deepen cooperation and expand it to other emerging markets.