Proton takeover talks with GM, Volkswagen collapse
Author: Robin Brown
Published: 21 November 2007
Proton has announced that it has ended takeover talks with Volkswagen and General Motors, with no agreements reached on future partnerships.
The state-owned Malaysian manufacturer was known to be involved with the two manufacturer groups with regard to increasing new-model technology and its network of parts suppliers. Hostility to an outright takeover is thought to have scuppered the talks.
Proton lost $176m in 2006, the first loss the manufacturer had posted for nearly two decades, having seen it share of its home market half between 2002 and 2005. Perodua overtook Proton this year as the country´s largest car-maker.
Proton has been exploring partnership possibilities with Volkswagen since 2004, with the German manufacturer announcing that it had signed an agreement to buy a 51% share in Proton in January 2007.
Volkswagen and GM are searching for Eastern manufacturers to extend production capacity and reach in emerging markets.
Future strategic partnerships have not been ruled out, but both Western manufacturer s are known to be keen on holding a controlling stake in an Eastern company. Both companies said they would seek a partner elsewhere.
Proton bought British automotive engineering group Lotus in 1996, with the Gen-II saloon following shortly after with a platform extensively developed by Lotus.
Proton recently announced plans to develop an ´Islamic car´ with Turkish and Iranian manufacturers that would include a compass that points ´to Mecca´.
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