Reuters - Friday, September
7
Volkswagen to
deepen government talks on Proton
"The talks with the main shareholder (state investment arm
Khazanah) - FRANKFURT, Sept 7 - Germany's Volkswagen , the world's
fourth-largest carmaker, has arranged high-level talks in coming
weeks on further steps towards linking up with Malaysian carmaker
Proton .
"The talks with the main shareholder (state investment arm
Khazanah) and the Malaysian government will now be further
intensified, in order to examine the possibilities of either a
cooperation or taking a stake in Proton," VW said on Friday.
Volkswagen has long been interested in strengthening its position
in Southeast Asia and first agreed to a "long-term" strategic
partnership with Proton in October 2004, only to say in January
2006 that it had scrapped the plans after Malaysia ruled out VW
taking control of Proton.
The loss-making Malaysian carmaker, set up in 1983 by former Prime
Minister Mahathir Mohamad, was for a long time state-protected due
to affirmative action policies aimed at giving the country's ethnic
Malays business and employment, and it sold at one point more than
half of all new cars in Malaysia.
But ever since barriers to competition started coming down, Proton
has lost market share not just to international rivals but also to
domestic carmaker Perodua.
Last November, the government announced it had decided to consider
giving approval for VW to take a controlling stake in Proton's
manufacturing operations.
The Malaysian government has also held talks with VW rivals PSA
Peugeot Citroen of France and General Motors of the United
States.