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Electric cars in SA

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VW to pounce on Proton next?

2010-05-27 07:56
Malaysian national carmaker Proton said it would reveal the results of talks for a possible alliance with German's Volkswagen AG next month after Wednesday announcing a profit in the quarter through March.

Proton's Chairman Mohamad Nadzmi Mohamad Salleh declined to say whether it would involve any equity tie-up or just a technical collaboration with Europe's largest carmaker. He said Proton has to focus on ramping up exports for its long-term survival, and is open to working with global carmakers to bolster economies of scale.

"We will make an announcement in one to two weeks," he told reporters.

Once the king of the road, Proton's fortunes have dwindled due to growing competition. Proton has been hunting for a foreign partner but the government's insistence on maintaining control over a national corporate icon has made it difficult for Proton to seal any meaningful partnership.

Volkswagen ended alliance talks with Proton in 2007 but later revived negotiations.

The Edge business weekly quoted sources as saying VW isn't likely to take an equity stake in Proton but would collaborate in platforms and engines. It could see a rebadging of the Passat as a replacement model for the Proton Perdana sedan, it said.

Is VWAG lining up for another marriage of convenience? What do you think?

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