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Thursday, June 21, 2007

Govt won’t sell entire Proton stake to VW

PUTRAJAYA: The Government, seeking a partner for Proton Holdings Bhd, ruled out selling its entire 43% stake to Volkswagen AG.

Volkswagen, the Government’s preferred partner for unprofitable Proton, wants a “substantial” stake in the carmaker, Deputy Prime Minister Datuk Seri Najib Tun Razak said in an interview.

“It’s the national car,” Najib said. “It can’t be all of the stake.”

Proton needs a partner after losing half its market share to competitors and posting its first annual loss in at least 17 years.

Control of an alliance may be key for Volkswagen, which would gain access to South-East Asia’s largest car market.

Volkswagen possibly wants a stake in the manufacturing division, Najib said.

Andreas Meurer, a spokesman for Volkswagen, said talks were continuing and declined to comment further.

Volkswagen is Europe’s biggest carmaker.

Najib declined to say if acquisition talks were limited to Proton’s manufacturing facilities or to name other possible partners because talks had not ended.

Offers and counter offers had been “bandied about” and negotiating positions were 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?”

Najib said the Government was prepared to let a foreign partner run Proton without political interference. The Government also hadn’t “closed the door” to companies other than Volkswagen, he said. – Bloomberg

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What is the main factor for you to buy a Proton Car?
Low price and no other choice due to budget
Good resale value
Low maintenance cost
Ride & Handling is good
Reliable parts, chasis and engine
Good Styling exterior & Interior
Patriotism (I support Made in Malaysia Products)
Follow others (Follow Majorities should be the best choice)