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Volkswagen eyes a 20 percent stake in troubled automaker Proton

September 13, 2007
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VW poloAccording to an official familiar with the negotiations, German auto giant Volkswagen is eyeing a 20 percent stake in loss-making carmaker Proton, and talks will soon secure a partnership. He told AFP on condition of anonymity that Proton and Volkswagen had their fourth round of talks in Bangkok two weeks ago and will be meeting again soon for further negotiations.

Second finance minister of Malaysia, Nor Mohamed Yakcop told reporters that he is optimistic and has a good feeling about this partnership with Volkswagen, and added that talks are going well so far. Prime Minister Abdullah Ahmad Badawi recently said Volkswagen was studying Proton for a possible strategic pact that would help save Malaysia's national carmaker, Malaysian authorities being on the major shareholders.

This deal would mean for Proton a battle for the top spot in Malaysia's domestic car market and a foothold in the lucrative European market, for Volkswagen-a stronger presence in the Southeast Asian region. Proton needs this partnership for foreign technical expertise to halt the sharp decline in market share and, and the 13.40 million dollar loss for the first quarter to June that was announced this week

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