Volkswagen, Europe's largest carmaker, is willing to buy Malaysia's state-controlled carmaker, Proton, adviser and former Malaysian Prime Minister Mahathir Mohamad said on Tuesday. Analysts say a foreign partner is pivotal to Proton's fortunes when Malaysia opens its long-sheltered auto market to foreign competition by 2008.
Proton, a brainchild of Mahathir, became Malaysia's dominant automaker as part of a government industrialisation drive that included imposing import tariffs of over 300 percent on foreign cars.
Volkswagen last year agreed a partnership deal with Proton that aimed to boost its presence in Southeast Asian markets. The deal did not involve taking equity stakes.
"If we want to, we can sell more than 50 percent to Volkswagen. They are quite willing, I think, to buy even 100 percent," Mahathir told a news conference. "There are many other companies which would gladly buy 100 percent of Proton. Our fear, of course, is if they buy 100 percent, they might close the production of our national car and just assemble their cars."
In March, Volkswagen said it would start assembling its Passat mid-sized model in Malaysia this year with Proton and add the subcompact Fox model in 2006.
In an interview in early June with German daily Frankfurter Allgemeine Zeitung (FAZ), VW Chief Executive Bernd Pischetsrieder said the company would consider taking a stake in Proton only once VW finishes its plans for the coming five to seven years.
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