Malaysian national carmaker Proton will regain consumer confidence and stay competitive underpinned by its recent joint venture with China-based company EcarX Technology, said analysts Thursday.

AmInvestment Bank said in a report that it is mildly positive on the joint venture in the long term as there will be technology transfer to Proton and this will assist the company in winning back consumer confidence while staying competitive in the local automotive space with more to offer compared with other competitors.

Proton announced on Wednesday that it had entered into a joint venture with local telecommunication company Altel Communications and EcarX Technology, aiming to help Proton developing more of its own digital technology and car connectivity systems.

Proton management also guided that the joint venture would allow Proton to explore the possibility of expanding its connectivity solutions to Proton's export markets, particularly in neighboring ASEAN countries.

"We think that this will be beneficiary for the group in the long term as this complements Proton's focus to equip future Geely-based model vehicles with advanced connectivity and technology," said the research house.

As Proton reiterated its aim to begin production of the X70 Sports Utility Vehicle (SUV) in the Tanjung Malim plant in the second half, the research house expects a price reduction for the popular SUV with the introduction of the locally-assembled (Completely Knocked Down) version to continue supporting the strong demand for the vehicle.

"We also look forward to the launch of the Proton X50 by the end of the year. We believe that the local automotive SUV landscape will be shifted with the introduction of the X50," said AmInvestment Bank.

China's automaker Geely acquired 49.9 percent of Proton from Malaysia's leading conglomerate DRB-HICOM that owned 100 percent of Proton in 2017. The X70 was the first product of the partnership and has been a hit in the Malaysian market after its launch.

Source: China ASEAN Business Council