In Cars, Geely, Local News, Proton / By Danny Tan / 28 September 2018 1:39 pm / 136 comments

Here’s something which formalises what the man on the street has been talking about since Geely came into the Proton picture. The Malaysian company – which Geely has a 49.9% stake in – has secured the use of intellectual properties (IP) and the rights to manufacture and sell three Geely models.

The three models are the existing Geely Boyue (Proton X70) plus two models that have yet to go on sale in China – the SX11 SUV and VF11 MPV. As of now, the B-segment SUV has been revealed (called Binyue in China), while the three-row MPV has been teased ahead of a full reveal.

The agreement – dated September 24 – is for the design, development, manufacture, sale, marketing and distribution of the three models; and it states Brunei, Indonesia, Malaysia, Singapore and Thailand as countries that Proton is allowed to market the licensed models. The licensing period is 10 years.

Note that all of the above are right-hand-drive markets, and Proton has been earmarked as Geely’s RHD and regional hub.

All this was revealed in an announcement by Hong Kong Stock Exchange-listed Geely Automobile Holdings Limited, which is the controlling shareholder of Zhejiang Geely Holding Group Company Limited (ZGH). The latter is a stakeholder in Proton. The license fee for the IPs is RMB 1,344,000,000 (RM808.3 million), which will be settled by ZGH in five equal annual instalments.

A related “Proton Sales Agreement” will see the Malaysian carmaker purchase CBUs, CKDs and related after-sales parts for the three models for a period of three years ending on December 31, 2020. The proposed transaction amounts are RMB 398,729,892 (RM239.8 million) for calendar year 2018, RMB 3,803,497,732 (RM2.28 billion) for 2019 and RMB 4,147,700,048 (RM2.49 billion) for 2020, with a margin of 5.83% factored in for the vendor.

In the note to its shareholders, Geely says that the sums are fair and reasonable, and are in the interests of the company and the shareholders as a whole.

The licensing agreement – which according to Geely is entered into in the ordinary and usual course of business, and conducted on normal commercial terms – will also provide an opportunity for the group to export its technology and products, besides generating additional income for the group. Geely has no operations in the covered ASEAN countries, so there’s no overlap for the group.

So there you go, the confirmation of the sleek VF11 as the “new Proton Exora” and a smaller B-segment sibling to the Proton X70, which official launch is just around the corner. What do you think of the trio?

GALLERY: Geely VF11 official teasers

