In a written reply to Teresa Kok (DAP-Seputeh), Abdullah said the plan will involve sales and marketing, efficiency in manufacturing processes, procurement, quality and reducing production cost.
Abdullah, who is also the Finance Minister, said that in the event Proton fails to gain a foreign partner, the national car manufacturer's shareholders will have to make the appropriate decisions and take the necessary steps to ensure Proton continues its role within the National Automotive Policy.
Kok had asked on the status of negotiations between Proton and its potential foreign partners and what the obstacles were to concluding the negotiations.
"What will be the Proton revival scheme and will the government inject new funds into the government-linked company in the event it fails to obtain the necessary funds from a foreign partner," she asked.
Abdullah added that the negotiations involving the shareholders of Proton, which include the government, with Volkswagen AG (VW) and General Motors were revived when no final decision was forthcoming by end-March this year. The government had imposed an end-March deadline to forge an alliance between Proton and a foreign partner.
"The negotiations are going on well and there is no obvious obstacle to bar the continued negotiations between both parties at the moment," Abdullah said.
Officials from the Prime Minister's office, the finance ministry and Khazanah Nasional Bhd have met with officials from VW twice in the last few weeks. It is understood that talks are progressing well. The other potential foreign partner the government has named is General Motors. Khazanah has a 42.7% stake in Proton.
Meanwhile, Bloomberg quoted Deputy Prime Minister Datuk Seri Najib Razak confirming that VW wants a "substantial" stake in Proton. It was reported that the government has "ruled out" selling its entire stake in Proton to VW, thus raising concern that disagreements over control will threaten alliance talks.
"It's the national car," Najib said in the interview with Bloomberg. "it can't be all of the stake."
"The only thing I'm afraid of is this government will get emotional with this," said Nordin Mohd Nasir, an analyst at Inter-Pacific Securities with a "trading buy" on Proton. "Proton doesn't have much to offer. It is still not visible when they will come up with this agreement."
Andreas Meurer, a spokesman for Wolfsburg, Germany-based VW said talks are continuing and declined to comment further. VW is Europe's biggest carmaker.
Najib declined to say if acquisition talks are limited to Proton's manufacturing facilities or to name other possible partners because talks haven't ended. Offers and counter-offers have been "bandied about" and negotiating positions are always changing, he said.
"Whether we can give up a substantial stake, that's the question," Najib said. "Substantial means majority. Are we willing to give up a majority in the manufacturing side?"
Proton last month reported a loss of RM591.4 million for the 12 months ended March 31 2007.
Najib said the government is prepared to let a foreign partner run Proton without political interference. The government also hasn't "closed the door" to companies other than VW, he said.