Proton, VW to cooperate on specific projects

Proton, VW to cooperate
on specific projects

January 28 2006


PROTON Holdings Bhd confirmed that a tie-up with Volkswagen AG, which includes the German carmaker taking a stake in the national car firm, is off.
Instead, they would only work on specific projects that include Volkswagen supplying products and components to Proton.


The new cooperation was confirmed by Volkswagen on Thursday via an official letter sent to Proton in Kuala Lumpur, Proton said in a statement.


Proton said with this understanding, the two parties "have now decided to bring to an end the proposed collaboration envisaged under the memorandum of understanding signed in October 2004".


"We have moved past the issue of Volkswagen eyeing any kind of shareholding and we are now able to work on specific initiatives that complement Proton's capabilities and current range of products," a Proton spokesperson said.


The cooperation will be in the areas of technical and engineering, training and systems as well as other commercial projects.


It may also include the possibility of supporting Volkswagen to explore the Malaysian dealers' network.


Technical discussions will be held soon by both parties, it said.


In a separate statement, Proton said it would jointly develop larger engines and environment-friendly alternative fuel systems with Petroliam Nasional Bhd (Petronas).


Proton is looking at bigger engines of between 1.8 and 2.2 litres.


Both parties will explore the possibilities of further developing Petronas' engines, particularly the compatibility of its EO1 engine to Proton cars.


Subsequently, they will be looking at potential commercialisation of the engine.


"This is a significant partnership ... Proton will be able to tap into Petronas' ready-to-use engine technology capacity in the most efficient manner and within the shortest timeframe possible," said Proton managing director Syed Zainal Abidin Syed Mohd Tahir.


They will also work to develop a natural gas vehicle system for Proton's use.