Volkswagen and Proton end talks
November 21, 2007 by Alborz Fallah
The Malaysian government and Volkswagen, the world’s fourth-largest carmaker, have ended talks without reaching a deal. It marks the second failed attempt by Volkswagen in two years to build up a production base in Southeast Asia.
Meanwhile the Malaysian government appears to have had enough, announcing today it would not seek a foreign partner for the ailing Proton for the time being.
The German manufacturer has long been interested in strengthening its position in Southeast Asia, initially announcing a a long-term strategic partnership with Proton in October 2004. However not everything went to plan as the Malaysian government ruled out a possible take over by VW which angered the Germans into leaving in January 2006.
The loss-making Proton was set up in 1983 by then Malaysian Prime Minister Mahathir Mohamad and was successful for the first two decades under the protection of a high tariff on imported cars. But since barriers to competition started coming down, it has lost market share to international rivals and Malaysia’s second biggest manufacturer Perodua.
The Malaysian government has also held talks with PSA/Peugeot-Citroen of France, as well as VW and GM, but all have proven futile.
The failure to reach a deal with Proton is mainly due to the Malaysian government’s fear of ceding management control to a foreign company, as well as being heavily lobbied by other manufacturers who fear the Europeans could flood the market.
Nonetheless analysts close to Proton doubt the company can survive in the long-term without a strategic partner and Volkswagen seemed to be the best, having done such a great job with Czech car-maker Skoda.
Volkswagen issued a statement today saying the company will now independently examine other possibilities to enter the Southeast Asian market and further strengthen its sales operations in the region including Malaysia.
Print it: 
*****PRIMO!*****
Proton should just shut up shop, they sell bugger all in Oz
If they where not owned by the GovCo of My. they would already be dead and buried.
I can broker a deal with the sale of Lotus though!
“Asia’s anwser to BMW” LOL Gold!!!
Cheers
F-0
****VOTE-NOW****
Let Proton die. It was political bull**** from the start and still is. No wonder nobody can see any sense in bailing it out.
Their vehicles are heaps of crap and if the Malaysians want to maintain control of it so badly then walk away and let them have it. For a while they dribbled on so much about having Lotus tuned suspension but even that could not sell cars. Putting Ugly Betty’s head on Elle’s body is not going to make her look any better, although she would certainly go a lot better (with a paper bag over her head of course) ROFLMAO. Put a paper bag on a Proton and you still would not buy it.
Thank God VW has come to it’s senses on this one – Putting the VW name to Proton Rubbish would have been as big a mistake as BMW-LR, Daimler-Chrysler, and a few others.
Would have set VW/Porsche/Audi back 20 years……
since malaysia is a protected market, VW would have gained a cash cow.
if the deal was successful, it would be bad for the country. if it isnt successful like now, its still bad for the country.
thats a lose lose situation.