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June 7, 2010

Malaysia's Proton says Volkswagen tie-up talks off

Malaysia's national carmaker Proton said Monday that Volkswagen AG will not collaborate with it because the German carmaker "has other priorities."
Proton said in a statement that Volkswagen "would be an interesting collaboration partner," but Volkswagen has declined during preliminary talks to partner up with Proton.
"Volkswagen confirmed that it currently has other priorities," the statement said. It did not elaborate, and a spokeswoman could not immediately give further details.
Proton said it would continue to work with other partners such as Mitsubishi and would aim to expand domestically and regionally.
State-owned Proton has been struggling to find a foreign partner to lift its fortunes. The government has insisted on maintaining control over the national corporate icon, making it difficult for Proton to seal any meaningful partnership.
Volkswagen last ended alliance talks with Proton in 2007 but later revived negotiations.
Proton managed to return to the black for the financial year ended March with a profit of 239 million ringgit ($72 million), from a loss of 302 million ringgit ($91 million) the previous year.
Revenue for the full year surged 27 percent to 8.2 billion ringgit ($2.5 billion) as Proton expanded its domestic market share to 28 percent from 26 percent the previous year. But its Chairman Mohamad Nadzmi Mohamad Salleh has said Proton has to focus on ramping up exports for its long-term survival.

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