Suzuki Motor Corporation (SMC) has signed an agreement to collaborate with Malaysian carmaker Proton Holdings Berhad (Proton). As part of the deal, Suzuki will supply CKD components for a compact passenger car to be rolled out next year.

Initially, Suzuki will supply the components; Proton will manufacture the car at its Tanjung Malim plant from August 2016 and will market this model, under the Proton brand, in Malaysia. Suzuki says other additional models will be mutually studied with Proton. Also, in the future, supply of engines and transmissions by Suzuki to Proton and installation of the same by Proton for its own models will be explored.

Osamu Suzuki, CEO, SMC, said, “All this while we have carried out our automobile business in Malaysia on our own. Through the collaboration with Proton from now on, we would like to develop a comprehensive synergy between the two companies.”

For Suzuki, which imports CBUs into Malaysia, the partnership with Proton will allow it to get a manufacturing footprint in the country. Proton, the first national carmaker in Malaysia, set up operations in 1983 and sold about 116,000 vehicles in 2014. It currently has a 17% market share there. While stiff competition over the years has seen the once-dominant company’s market share fall substantially, this collaboration is likely to get Proton more traction in its domestic market.