Print

Mail

wiki links

VW, Proton close to reaching deal: Malaysian paper

Volkswagen chief executive officer Martin Winterkorn will visit Malaysia in the next few weeks to conclude a deal between the German automotive giant and state-owned carmaker Proton, a report said yesterday.

The trip "should be to finalize a deal between Volkswagen and the [Malaysian] government with regards to Proton Holdings Bhd," the Edge business weekly newspaper said.

Malaysian officials could not be reached for comment.

SETTLING `QUESTIONS'

The visit by the Volkswagen chief executive officer "should settle a lot of questions that have plagued the negotiations," the paper said.

A Malaysian official said earlier this month that Volkswagen was keen to take a 20 percent stake in the loss-making national carmaker amid reports talks would soon secure a partnership.

Malaysian Prime Minister Abdullah Ahmad Badawi had confirmed talks were ongoing but said there was no formal request from Volkswagen for a stake in Proton.

Malaysia had already expressed optimism about securing a partnership with Volkswagen.

STRATEGIC PACT

Abdullah said that Volkswagen was studying Proton for a possible strategic pact that would help save Malaysia's national carmaker.

For Proton, a deal is expected to boost efforts to reclaim the top spot in Malaysia's domestic car market and help it get a foothold in the lucrative European market.

Proton needs foreign technical expertise to halt a sharp decline in market share and stem a stream of red ink, including a 46.75 million ringgit (US$13.40 million) loss for the first quarter to June.

Volkswagen hopes to bolster its presence in the Southeast Asian region with the partnership.

Malaysia hopes that the deal will be wrapped up by the end of the year.
This story has been viewed 1181 times.