| In the news: Europe's largest automaker and | | | | foreign alliance with Mitsubishi Motors Corp. |
| producer of Volkswagen relay said that its | | | | unfortunately the partnership didn't last |
| ongoing talks with Malaysia's Proton Holdings | | | | long and ended in 2004. There are two other |
| Bhd are already at its advanced stage since | | | | automakers that are discussing the |
| it is really planning to seek a platform to | | | | possibilities of partnership with Proton, the |
| expand its market in Southeast Asia. | | | | PSA Peugeot Citroen and General Motors |
| | | | Corporations. However PSA Peugeot Citroen has |
| According to Kevin Rose, Volkswagen's head of | | | | ended talks with Proton last week while |
| international sales, "both parties clearly | | | | General Motors is said to be still having |
| know what they would want from such an | | | | ongoing discussions. Unfortunately, no |
| agreement." He also said that the company is | | | | details were released regarding the talks |
| also working to meet the deadline set by the | | | | between GM and Proton. |
| Malaysian government which is scheduled on | | | | |
| March 31, 2007. | | | | Volkswagen to Control Production |
| | | | |
| Volkswagen has already added capacity in | | | | According to the Wolfsburg-based automaker |
| China and will expand in India to boost sales | | | | controlling of local production is the key |
| of its Jetta and Passat models in two of the | | | | strategy to survive in emerging markets such |
| world's fastest growing major economies. It | | | | as Malaysia and India. "For us a brand, it's |
| should be noted that just last Proton has | | | | important that we can always say made by VW, |
| again reported its biggest quarterly loss in | | | | or built by VW. Even in China, where for |
| at least eight years and has been market | | | | legal reasons we are a minority partner, we |
| share to overseas rivals including Toyota | | | | still have a great control over the |
| Motor Corp. Proton needs new design and | | | | production, assembly, design of our products, |
| technology in order to become competitive not | | | | and that's incredibly important for us," |
| only in Malaysia but in the world and it | | | | explained Kevin Rose. |
| needs Volkswagen to provide it with the help | | | | |
| that it needs to survive. | | | | It is no secret that initial talks between |
| | | | Volkswagen and Proton have collapsed January |
| Ang Kok Heng, who manages 114 million stocks | | | | last year after the two companies disagreed |
| at Philip Capital Management in Kuala Lumpur, | | | | on issues pertaining to the control of the |
| said "there are a lot of things Proton needs | | | | company. Fortunately, all issues have been |
| to learn in order to be competitive and | | | | settled resulting to the resuming of talks |
| having a partner will help it catch up with | | | | between the two automakers. |
| the bigger boys." | | | | |
| | | | About Proton |
| Despite the losses that Proton has obtained | | | | |
| it has managed to increase its shares by as | | | | Malaysia's government owns 43 percent stake |
| much as 3.1 percent and closed up 5 sen or | | | | at Proton held by its investment unit, |
| 0.8 percent at 6.55 ringgit in Kuala Lumpur, | | | | Khazanah Nasional Bhd. It was Former Prime |
| valuing the company at 3.6 billion ringgit or | | | | Minister Mahathir Mohamad who set up Proton |
| $1 billion USD. However in terms of stocks, | | | | in the year 1983 and become the bedrock of |
| Proton's stocks have declined by 0.8 percent | | | | the country's manufacturing industry. Former |
| this year while Malaysian benchmark index has | | | | Prime Minister Mohamad said last year that |
| climbed 7.8 percent. | | | | Proton will collapse without a foreign |
| | | | partner. It was in July 1985 that Proton |
| Proton is not the first Malaysian automaker | | | | launched its first model the Proton Saga |
| that has seek for a foreign partner, the Shah | | | | which became the country's most popular car |
| Alam, Malaysia-based automaker has sought | | | | for taxis. |