Ailing national carmaker Proton joined forces with Japan's Mitsubishi Motors in a new cooperation deal which will help the ailing Malaysian firm develop desperately-needed new models.

Mitsubishi, Japan's only loss-making major automaker, also hopes that the deal inked in Kuala Lumpur yesterday by its president Osamu Masuko will help it expand its business in Malaysia.

"Proton will be able to diversify its vehicle range and accelerate the effort to achieve better quality and manufacturing process," they said in a joint statement.

The tie-up also covers the supply of auto parts between Proton and Mitsubishi, technical support for engineering and quality control, and the development of Proton's manufacturing facilities.

The two firms are reviving a relationship which began two decades ago when Mitsubishi helped Proton make its first car, and cooled in 2004 when Mitsubishi sold its shareholding in Proton as part of efforts to come out of the red.

However, it continued to provide some production parts and components to the Malaysian company.

"We hope to build a mutually beneficial business relationship with Proton, one which is even more mutually beneficial than our previous relationship of just supplying parts and components to Proton," Masuko told a press conference.

Proton's new managing director Syed Zainal Abidin Syed Mohamed Tahir said there were no moves underway for Mitsubishi to buy back into the Malaysian firm.

"As of now there is no equity collaboration. We will leave it at that for the time being. If there is an opportunity to discuss in the near future that will be of mutual benefit, surely both parties will sit down and discuss," he said.

Take some time

Syed Zainal said that the promised new models under the arrangement would not materialise this year.

"Obviously we would like to sell more cars, but the actual (new) model in the collaboration between Mitsubishi and Proton is not going to happen very quickly," he said.

"In doing a new car, or even sharing development, it is going to take some time. I don't think we will see it in this year," he said, adding that Proton had one new model in the works and due for release in 12 months.

Mitsubishi Motors has been struggling to return to profit following years of slumping sales caused by a series of defect cover-up scandals.

Proton is also in serious trouble, particularly after Volkswagen last month said it would not pursue a strategic alliance which was seen as its great hope to improve quality standards and reclaim falling market share.