VW-Proton talks at fairly advanced stage

KUALA LUMPUR: Volkswagen AG said talks on a partnership with Proton Holdings Bhd are at a “fairly advanced'' stage, as Europe's largest carmaker seeks a platform to expand in South-East Asia.

“Both parties clearly know what they would want from such an agreement,” Kevin Rose, Volkswagen head of international sales, said in an interview. He said the company would “work within” the Malaysian government's March 31 deadline.

“There are a lot of things Proton needs to learn in order to be competitive,” said Ang Kok Heng from Phillip Capital Management. “Having a partner will help it catch up with the bigger boys.”

The automaker has sought an alliance since Mitsubishi Motors Corp ended their partnership in 2004. PSA Peugeot Citroen ended talks with Proton last week, while General Motors Corp said discussions were still ongoing.

Wolfsburg, Germany-based Volkswagen, said having control of local production was key to its strategy in emerging markets such as India and Malaysia.

“For us as a brand, it's important that we can always say made by VW, or built by VW,” Rose said in Singapore late yesterday. – Bloomberg