Proton shares down as carmaker moves closer to a deal with Volkswagen
After hitting a high of 6.10 ringgit earlier in the day following a report saying that it was one step closer to a deal with German auto giant Volkswagen, Malaysian carmaker Proton shares closed lower, at 5.70 ringgit. Second Finance Minister Nor Mohamed Yakcop declined to reveal details following a third round of talks between the two interested sides. Proton and Volkswagen met for a third time in Germany recently after holding previous negotiations in Thailand and the United States.
The Edge business newspaper said that Malaysian representatives of Proton's stakeholders have inched closer to a final deal with Volkswagen. Analysts also agree that investor interest in the troubled company grew as the shares rose and the government developed a plan to scrap cars 15 years and older on a voluntary basis. The Edge said among areas that have already been agreed are that Proton will control its domestic distribution network and Volkswagen will take care of its international distribution. According to AFP, Proton needs foreign technical expertise to stem a sharp decline in market share and cut losses.
Proton last year lost its status as Malaysia's biggest-selling automaker to the homegrown rival Perodua and recently reported net losses of 591.36 million ringgit (172.4 million dollars) for the year to March 2007, larger than analysts had expected.
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