Malaysia's Proton in talks with M&M again to enter India

Malaysian car-maker Proton, which has been looking to enter the Indian auto market for the last many years, is understood to have started talks again with Mahindra & Mahindra (M&M) for a partnership.

According to industry sources, talks between the two firms in 2007 did not fructify, following which the Malaysian car-maker had opened a dialogue with some other Indian players, including Argentum Motors.

Incidentally, an exclusive US dealer for M&M filed a law suit this week against the Indian auto giant for delays in introducing a pick-up truck in the American market.

"Talks started again this year. There is a possibility of a partnership," a source in-the-know of the development said.

When contacted, an M&M spokesperson declined to comment, saying, "We do not comment on speculative reports." No comments could be obtained from Proton.

Earlier, Proton was linked with contract manufacturer Argentum Motors, which acquired the manufacturing unit of the defunct Daewoo Motors India at Surajpur, for a possible tie-up.

Proton, on the other hand, is clear that it needs to have a presence in India.

"Moving forward, the group (Proton) will also focus on high-growth regional markets in ASEAN for the completely built-up (CBU) market, as well as China, India and Iran for the completely knocked-down (CKD) market," Proton said in its annual report for 2009.

The sources said M&M could provide Proton support in the assembly of CKDs.

Proton has identified India as one of the key markets to export its products.

"Apart from the local market, we have begun a more aggressive approach to capture export markets as defined under the Asian Multi-Local OEM (AMLO) strategy, namely ASEAN, China, India and the Middle East-North Africa (MENA)," the report said.

Proton's interest in India also stems from the fact that the country was among those "markets that have been relatively resilient from the fallout of the economic crisis".

Some of the models that Proton sells include multi-purpose vehicle Exora, small car Savvy and sedan Saga.