KUALA LUMPUR: After nearly 18 months of negotiations, a deal has been struck to forge a partnership between Proton and a strategic partner, likely to be Volkswagen AG (VW).

Sources said the negotiations between the government and VW had been concluded and a memorandum of intent (MOI) would be signed soon.

He said the MOI would set the stage for further due diligence and collaboration between the two parties. The collaboration is likely to be in the area of manufacturing, marketing and distribution. It would also ensure that the foreign partner would be committed towards making Proton an internationally competitive carmaker.

Sources say that apart from VW, General Motors is still in the hunt to be a strategic partner. It is learnt that the government was still in “hard negotiations” with VW and GM for the strategic stake in Proton, notwithstanding the upcoming MOI, as the government was making sure it explored all possibilities for the best deal.

Among the key features being considered are that the brand name Proton should be maintained even with the strategic tie-up. This is something synonymous with VW as it had turned around national automobile companies without changing the identity of the cars.

“The foreign partner must have scalability, research and development capabilities to produce new models and market access ... these are the things Proton lacks,” the source said.

Currently, Proton produces more than 100,000 vehicles per year while the global giants produce up to 500,000 per country. Proton also does not have the financial resources to improve its technology and embark on massive marketing campaign overseas to expand its sales. Hence, it is largely a domestic model after more than 20 years of existence.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said the government had been in talks with several parties, both local and foreign, for a strategic stake in Proton.

The government had failed to meet its self imposed March 31, 2007 deadline to announce a strategic partnership for Proton and had since then deferred the deadline to year-end.

Asked on why the negotiations were taking so long to conclude, sources said the government wanted to make sure the “ecosystem” of vendors and other support services to Proton would not be eliminated.

“If Proton goes down, so do a lot of other companies, including Perodua, which also supplies parts to Proton. If it was just a commercial consideration between Proton and a foreign party… the deal would have been done a long time ago,” the source said.

He added that the government also did not want to be short-changed again like the deal between Proton and Mitsubishi Motors, where the latter only supplied the engine but failed to bring Proton into the international arena.

On why the government had not chosen a local partner for Proton, the source said a local partner would not be able to add value to Proton. He added that: “Giving Proton to a local partner is like giving it to another middle man.”

It was reported that a number of local companies, such as DRB Hicom Bhd, the Naza Group and the Mofaz Group were interested to take up a stake in Proton. But after some long deliberations, it was decided that a foreign partner would be the best for Proton.

The verdict is out - Proton and Volkswagen are not tying up together in a partnership that involves stake transfer.

Second Finance Minister Tan Sri Nor Mohamed Yakcop says the earlier plan for Proton to have a foreign strategic partner was no longer applicable as circumstances have changed.

Proton has shown clear improvement in the recent months, including significantly improved sales figures and a popular new model. It will also be launching the new BLM soon, the long awaited People’s Car replacement for the ageing Proton Saga, which despite its age has also become a sales success in recent months thanks to the new Merdeka promotion pricing. The new Proton Saga replacement will come in 2008. There is also an MPV in the works for a 2009 launch.

Consumer confidence in Proton have also been slowly restored, though Proton has a long way to go in that area. Other improvements that the government noted include improving overseas ventures - Proton has had dealings with Iran and China recently. It exported 5,000 Wajas to Iran with plans for GEN2 assembly there, and negotiated a rebadging deal with China’s Jinhua Youngman for them to sell GEN2 cars there under the Europestar badge.

Tan Sri Nor Mohamed Yakcop says Volkswagen did not walk away from the negotiation, and there was no breakdown in talks. Volkswagen was disappointed in the government (Khazanah)’s decision to pull out of the talks, but respected its decision.

The government does not rule out the possibility of future strategic alliances with foreign partners, but only at a more appropriate time and when Proton is in a stronger negotiating position. And from what the public can see at least, Proton looks like it is on its way to that position.

Malaysian authorities told the Anatolia news agency that Proton aims to enter the European markets, noting that the Malaysian firm is developing a strategy in which it would produce vehicles in Turkey that would be sold here and in Europe.

Considering that the Turkish automotive industry produced 1.13 million vehicles in 2007 and aims to increase its production to 2 million in 2012, world automotive producers have expressed interest in Turkey. In four years Turkey plans to have moved from 14th place to 10th place in the world in terms of number of cars produced annually. Thus automotive producers around the world are closely following developments in the Turkish auto sector and are looking for investment opportunities in the country.

Far Eastern automotive producers perceive Turkey as a big market and a strategic location with its role as a bridge between Asia and Europe.

Proton, which is the newest large automotive producer in the world, was founded by former Malaysian Prime Minister Mahathir Mohamad in 1982. In 1983 Proton took on the role of being a locomotive for Malaysian economic development with its Japanese technology supported assembly-based production. While 52 percent of Proton, which employs 9,500 people including 1,500 R&D employees, belongs to the Malaysian state, 48 percent belongs to national and international investors.

Proton exports its products to over 20 countries, including Britain and Australia. The company produces its cars in China, Vietnam and Iran and plans to reach a production level of 1 million vehicles annually within five years in the context of its development strategy.

Proton's Turkish distributor is Ulu Motor, a member company of the Ulubaşlar Group. Proton had previously marketed its Persona, Compact and Coupe models in Turkey in 1998; however, it ceased its marketing activities and left the Turkish market in 2000 because of import issues. After the problems regarding the import of Asian-make vehicles were solved, Indian Mahindra, Iranian Samand and Chinese producer Chery entered the Turkish market.

KUALA LUMPUR, Malaysia — Prime Minister Abdullah Ahmad Badawi said the Malaysian government is no longer providing special support or protection to the national carmaker Proton. He was quoted by the Bernama news agency.

The result of that decision is that prices likely will rise on Proton vehicles, now that the company no longer enjoys preferential treatment on taxes and other government incentives. Even if the prices on competitors' products don't get much cheaper, the price gap is still expected to narrow with Proton, which has commanded the lion's share of the Malaysian market for a long time.

The company launched its most recent model, the new-generation Saga compact, in January. But Proton's share of the total market has dwindled to around 30 percent, from more than 60 percent through much of the 1990s.

Talks on potential tie-ups with Volkswagen and General Motors ended late last year. Malaysia's DRB-HICOM, which controls Proton's retail distributor, Eon, has submitted a proposal to the government to take a strategic stake in Proton.

In March 2006, Malaysia dramatically reduced import duties on completely built-up vehicles and knocked-down kits.

marinič... je napisal/-a:ne vem, meni izgleda povsem češko. vsaj VW mora biti

Dr.M3 je napisal/-a:

marinič... je napisal/-a:ne vem, meni izgleda povsem češko. vsaj VW mora biti

? Kaj ima veze VW in Proton? Zgleda, da je en pršu sam prcat.

marinič... je napisal/-a:ne vem, meni izgleda povsem češko.

Je sedaj to ok?