PROTON Forms Partnership With AAPICO To Expand Production

PROTON has formed a partnership with AAPICO Hitech Public Company Limited, one of Thailand’s largest auto parts companies. This collaboration sees Aapico acquiring a 60% stake in PROTON subsidiary, Advance Vehicle Engineering Global Sdn Bhd (AVEE Global). PROTON will retain 40% in the company which has been renamed Aapico Avee Sdn Bhd.

AVEE Global / Aapico Avee is a producer of dies, jigs, hot stamping parts, body assembled parts and chassis components. The PROTON-Aapico partnership will see Aapico make an initial investment of RM40 million into AVEE Global’s 20-acre facility with plans for further expansion to cater to the growing demand for PROTON vehicles and the overall automotive sector. Another RM100 million investment is planned for 2024 for plant extensions and acquisition of new machinery.

The manufacturing facility will soon be ramping up its production volume with new products in the pipeline. With its vast experience and expertise, Aapico will be managing operations and introducing new technology applications to produce better quality parts, improve production and cost efficiency. Future expansion will also see the development of human capital with more job creation to attract 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 Public Company Limited.

For PROTON, the JV will strengthen the company’s ambitions to become a major player in the ASEAN automotive market. By leveraging on Aapico’s economies of scale and investment initiatives and combining it with PROTON’s own existing technologies in areas such as hot press forming of body parts, the company hopes to be able to move to the forefront of one of the fastest growing automotive regions in the world.

“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.

This investment is in line with the government’s efforts to generate sustainable economic growth, increase competitiveness and create innovative and high skilled employment opportunities in the workforce, particularly in the manufacturing sector where the automotive industry and related sectors play a significant role in contributing towards employment and to Malaysia’s GDP.

The Aapico-PROTON strategic partnership is actually Aapico’s 2nd venture into 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 of the JV while Purem has the remaining 51% of Purem Aapico Sdn Bhd which will produce exhaust systems and will begin supply to PROTON in Q3 this year.

Yeap added, “We hope that these initial 2 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.”

Prior to this, Aapico’s presence in Malaysia comes in the form of car dealerships. The company owns and operates 6 car dealerships in Malaysia, for of which are 4 Proton outlets.