We Will Continue To Introduce New Models, Says Proton MD

KUALA LUMPUR, Nov 20 (Bernama) -- Proton will continue to introduce new models and expand significantly overseas by making inroads into Iran, China, Indonesia and Thailand soon among the current 24 markets it is already in.

"This will complement the improvements in the domestic market," its managing director, Datuk Syed Zainal Abidin Syed Mohamed Tahir said here today.

Responding to the government's decision announced today to call off negotiations for a possible alliance between the national car maker and Volkswagen or General Motors, he said Proton had been working on several initiatives even before negotiations began.

"These include new model development, quality improvements, dealer network consolidation and operational efficiency and export expansion," he said in a statement.

"We are now seeing some initial results of these initiatives, in particular the successful launch and reception of Persona, resulting in increased confidence amongst our customers and business associates as well as market share gains," said Syed Zainal.

He said Proton respects the government's decision.

Besides preservering to introduce new models in the future while meeting customers' expectations in service and product quality, efforts would continue in enhancing operational efficiency as well as dealer and vendor consolidation.

"This latest development, however, does not detract Proton from continuing its efforts to seek opportunities to enhance our product portfolio, access to markets, technology and operational efficiencies."

"All these will add value and place Proton in a better position for any potential future strategic partnership," he said.

-- BERNAMA

Proton Ends Talks With Volkswagen & General Motors On Possible Alliance

KUALA LUMPUR, Nov 20 (Bernama) -- Proton Holdings Bhd has ended negotiations with German car manufacturer Volkswagen and General Motors Corporation of America for a possible alliance as the fortunes of the national car maker in terms of sales and exports are improving.

Khazanah Holdings Bhd, as the major shareholder of Proton and the investment arm of the government, said in a statement here today the government has taken note of the recent positive developments at the national car maker.

"The government is, therefore, of the view that Proton's management should be allowed to continue with its plans to further strengthen the company," Khazanah said.

"The issue of strategic alliance, if necessary, can be considered at a later date," it said.

Proton first announced its intention to begin talks with Volkswagen in October 2004 for a strategic partnership while talks were to have started with GM early this year.

Second Finance Minister Tan Sri Nor Mohamed Yakcop, in a briefing here today, said Volkswagen did not walk away from the negotiations nor was there any breakdown in the talks.

Nor Mohamed said the turnaround seen at Proton in recent months was real and as such, the earlier assumptions that Proton has to have a foreign partner to stay afloat was no longer applicable.

He, however, said the government will not dismiss the possibility of Proton having strategic alliances with foreign partners in the future when the time is more appropriate and this will also be premised on the fact that Proton will be negotiating from a stronger position.

Proton's latest model, the Persona, registered strong sales with bookings of about 22,000 units by end-October following its launch in mid-August.

Proton also recently secured a deal to export 5,000 Wajas to Iran and plans are afoot to assemble 40,000 Wajas there annually by 2012.

-- BERNAMA

Proton Ends Talks With Volkswagen & General Motors On Possible Alliance

KUALA LUMPUR, Nov 20 (Bernama) -- Proton Holdings Bhd has ended negotiations with German car manufacturer Volkswagen and General Motors Corporation of America for a possible alliance as the fortunes of the national car maker in terms of sales and exports are improving.

Khazanah Holdings Bhd, as the major shareholder of Proton and the investment arm of the government, said in a statement here today the government has taken note of the recent positive developments at the national car maker.

"The government is, therefore, of the view that Proton's management should be allowed to continue with its plans to further strengthen the company," Khazanah said.

"The issue of strategic alliance, if necessary, can be considered at a later date," it said.

Proton first announced its intention to begin talks with Volkswagen in October 2004 for a strategic partnership while talks were to have started with GM early this year.

Second Finance Minister Tan Sri Nor Mohamed Yakcop, in a briefing here today, said Volkswagen did not walk away from the negotiations nor was there any breakdown in the talks.

Nor Mohamed said the turnaround seen at Proton in recent months was real and as such, the earlier assumptions that Proton has to have a foreign partner to stay afloat was no longer applicable.

He, however, said the government will not dismiss the possibility of Proton having strategic alliances with foreign partners in the future when the time is more appropriate and this will also be premised on the fact that Proton will be negotiating from a stronger position.

Proton's latest model, the Persona, registered strong sales with bookings of about 22,000 units by end-October following its launch in mid-August.

Proton also recently secured a deal to export 5,000 Wajas to Iran and plans are afoot to assemble 40,000 Wajas there annually by 2012.

-- BERNAMA

Car launch not tied to Proton-VW negotiations

PUTRAJAYA: The production of Proton's latest model, the Persona, has nothing to do with negotiations between the national carmaker and Volkswagen AG for an alliance, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Refuting an article by a foreign news agency quoting him as saying otherwise, Abdullah said: “The foreign news reporter asked if the new car would enhance Proton's standing because Volkswagen would like it that Proton has a good car.

“My reply was that talks between Proton and Volkswagen had nothing to do with the production of this car or any particular car.

“We are talking about some kind of general cooperation that could possibly be either on equity participation or in the form of some other kind of cooperation,” he told reporters after a briefing on Pemudah here yesterday.

The news agency report said Abdullah had confirmed for the first time that Volkswagen was conducting due diligence on Proton, as part of negotiations for a possible strategic alliance.

21-06-2007: PM: Proton-VW talks going on well

Proton Holdings Bhd will implement an integrated initiative under a business turnaround plan in a move to revive its business, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

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.

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

'Positive News' On Proton-VW Tie-Up Can Be Expected In June - Nor

KUALA LUMPUR, June 13 (Bernama) -- Some positive news can be expected later this month on negotiations for Volkswagen AG to become national carmaker Proton's strategic partner, Second Finance Minister Tan Sri Nor Mohamed Yakcop said tonight.

The government, according to him, is hopeful that the second round of talks between the two parties will be successful as the earlier round in New York had shown positive signs.

"InsyaAllah, we hope the discussions with Volkwagen now entering its second stage will be successful and we will in a short time be able to say something on the progress of the talks," he said during an hour-long live interview over RTM1.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday Proton and Volkwagen are expected to have a second round of talks soon in Bangkok.

Nor Mohamed clarified that he was not involved in the first round of talks between the two carmakers in New York although he was also in that city at the same time.

"I was there to meet rating agencies and investors... I did not meet Volkswagen, others did," he said.

On Proton and General Motors having a possible partnership, Nor Mohamed said that remains "on the table," but said he is unable to shed light on it.

-- BERNAMA

13-06-07: PM: Proton-VW talks positive

Another round of talks between the government and Volkswagen AG of Germany on a tie-up with Proton Holdings Bhd will be held in Bangkok “soon”, Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday.

It is believed that details of a possible merger between the two companies will be fine-tuned then.

Abdullah described the New York talks as “positive” but declined to elaborate, when commenting to reporters on the latest developments concerning negotiations with VW.

According to those close to the negotiations, the New York talks were “positive” in that there were only a few areas where accord was not reached.

The Edge Financial Daily reported last Thursday that high-level talks between VW and Proton were held in New York.

It was reported that talks were at the final stage and that Sime Darby Bhd may take over Khazanah Nasional Bhd’s stake in Proton. It is believed that the same parties would meet in Bangkok.

However, a VW spokesman had denied The Edge Financial Daily report to Bloomberg. “This report is definitely wrong and only rumour without substance,” Andreas Meurer, VW’s Germany-based spokesman had said in a phone interview with Bloomberg last week. “We will have a round of talks soon,” he was quoted further.

It is understood that the Malaysian side was represented at the New York negotiations by representatives from the Prime Minister’s department, Khazanah and Sime Darby.

Sources close to the government had indicated that Sime Darby may take over Khazanah’s 42.7% stake in Proton if “the need arises”.

It had been earlier speculated in a foreign press report that Sime Darby’s chief executive Datuk Ahmad Zubir Murshid may have played a facilitating role in the New York talks.

According to sources, the details of the deal are “not far off” from what has been bandied around for the last two-and-a-half years.

“VW’s plan to take a 51% stake in a new company in which will be housed key Proton assets has not changed over the last two years,” said a source.

The VW plan as announced was to acquire Proton’s manufacturing, research & development and engineering divisions, including its loss-making UK subsidiary, Lotus.

VW had also indicated earlier that the cars it manufactures with Proton in Malaysia would be for both the domestic and regional markets initially, where it would be marketed as Protons.

VW’s plans include using Malaysian vendors and parts manufacturers, in an approach not dissimilar to the model it used when taking over Skoda of then Czechoslovakia.

Meanwhile, it is believed that the plan for Sime Darby to take over Khazanah’s block is also a rehashed version of an original plan submitted last year.

One source said: “Sime’s Proton plan was the first on the table, even before the Naza Group’s and DRB Hicom Bhd’s. However, they withdrew their proposals late last year.”

It is believed that Sime Darby withdrew its proposal when it was decided that Khazanah should remain Proton’s local owner and work with the foreign partner.

Proton fell 15 sen to RM6.10 yesterday.

Proton-VW talks fruitful

BANGI: Discussions in New York last week with Germany’s Volkswagen AG on a rescue plan for ailing national carmaker Proton Holdings Bhd have been fruitful.

Datuk Seri Abdullah Ahmad Badawi said he was told that a second round of discussions would be held in Bangkok.

The Prime Minister said he was told that the outcome of the talks in New York was positive.

“The fact that they want to have another round of discussions means that both sides are happy with the first results.

“Both sides are in positive mood,” he said when commenting on the latest developments on Proton’s discussions with Volkswagen.

He was speaking to reporters after opening the National Convention of Imams at Universiti Kebangsaan Malaysia here yesterday.

However, Abdullah declined to elaborate on the discussions, saying that he was in no position to give details.

The discussions between Proton and Volkwagen were meant to give a clearer direction for Proton, which posted a net loss of RM591.36mil for the year ended March 31, 2007, versus a net profit of RM46.69mil the previous year.

Analysts had repeatedly said that Proton, whose cash pile is depleting, needed a strategic foreign alliance soon for the company to return to profitability.

Rundingan strategik Proton, VW

KUALA LUMPUR 9 Jun – Rundingan yang sedang berjalan antara Proton Holdings Bhd. (Proton) dengan Volkswagen AG (VW) dari Jerman di New York berhubung kerjasama mereka kini menarik perhatian banyak pihak dalam industri automotif dari dalam dan luar negara.

Anda mungkin bertanya: ‘‘Orang Malaysia dan Jerman berbincang mengenai nasib syarikat kereta nasional kita di Amerika Syarikat (AS)?’’

Anda juga mungkin hairan: “Mengapa rundingan tersebut tidak dibuat di Tanjung Malim atau Jerman, mengapa Amerika Syarikat yang di luar peta?’’

Pegawai Proton menjelaskan bahawa rundingan itu diadakan jauh di luar negara kerana para perwakilan Proton dan Khazanah Nasional Bhd. dan wakil kerajaan Malaysia adalah satu strategi dan perlukan ketenangan kerana rundingan dengan VW kali ini melibatkan banyak perkara yang ‘sensitif’.

Malahan rundingan itu sengaja diadakan serentak dengan kehadiran Menteri Kewangan Kedua, Tan Sri Nor Mohamed Yakcop dan delegasinya yang sedang melawat New York sekarang bagi mengelakkan para perwakilan Proton yang terlibat dalam rundingan itu terganggu dengan sebarang spekulasi. Mungkinkah?

Khazanah, yang merupakan sayap pelaburan kerajaan Malaysia selaku pemegang saham terbesar dalam Proton sebanyak kira-kira 43 peratus perlu memainkan peranan dengan begitu teliti dalam rundingan dengan VW.

Ini bagi memastikan identiti Proton sebagai syarikat kereta nasional tetap terpelihara dalam mencari rakan strategik yang boleh membawa `nafas’ baru kepada syarikat kereta nasional itu yang sedang berhadapan dengan masalah kerugian besar.

Pegawai Proton menjelaskan memang sukar mencari kaedah penyelesaian terbaik kepada masalah Proton sekarang kerana tiada sesiapa pun mahu melabur dalam sesebuah entiti sekadar menjadi pemegang saham minoriti, lebih-lebih lagi dalam keadaan Proton berdepan dengan masalah kerugian.

Sedangkan pihak yang bakal menjadi rakan strategik terutama VW dalam konteks ini terpaksa membuat pengorbanan besar mempertaruhkan teknologi dan inovasinya dalam model-model kereta berkualiti tinggi buatan syarikat kereta dari Jerman itu, yang tinggi harganya.

Malahan faktor itu dikatakan menjadi penyebab utama `tumbangnya’ rundingan usahasama dengan syarikat pengeluar kenderaan Perancis, Peugeot S.A sebelum ini dan juga dikatakan punca VW sebelum ini keberatan meneruskan rundingan pada Mac lalu.

Kerajaan Malaysia telah mula mencari rakan strategik untuk Proton sejak usahasamanya dengan Mitsubishi Motors Co. tamat pada tahun 2004.

Sejak itu, beberapa siri perjanjian persefahaman dijalin oleh pengurusan baru Proton bagi menyelidik kemungkinan mengadakan usahasama dengan Peugeot dan Chery dari China, bagaimanapun semua usaha itu menemui jalan buntu.

Berdasarkan `teori’, Proton berunding dengan VW untuk mencipta perkongsian strategik iaitu pengeluar kereta Jerman itu akan memindahkan teknologi automotif dan membantunya mengeluarkan model baru bagi pasaran eksport, tetapi dari segi realiti banyak perkara perlu dihalusi oleh kedua-dua pihak sebelum mereka boleh mencapai sebarang keputusan muktamad.

Di pihak VW, tarikan utamanya terhadap Proton ialah kemudahan kilang pembuatan kereta canggih miliknya di Tanjung Malim yang boleh membantunya mengeluarkan kereta sedan berenjin saiz kecil pada kos yang rendah di Malaysia untuk pasaran rantau sebelah sini.

Semua pihak bersetuju malahan Penasihat Proton, Tun Dr. Mahathir Mohamad bersetuju pakatan strategik adalah penyelesaian kepada masalah dihadapi Proton pada masa ini.

Keadaan tiba ke tahap membimbangkan apabila Proton terus-menerus mencatat kerugian dalam prestasi kewangan tahunannya pada bulan lalu dengan mengalami kerugian besar sebanyak RM619.9 juta.

Ia mendorong Perdana Menteri, Datuk Seri Abdullah Ahmad Badawi pada 31 Mei lalu, menggesa Proton melakukan apa sahaja bagi kembali membuat untung termasuk mencari calon rakan kongsi yang baru.

Dalam konteks ini, ia sekali gus menjadi titik tolak kepada Khazanah untuk melonggarkan sedikit ketegasannya daripada segi pembahagian ekuiti dengan pihak yang berminat menjadi rakan kongsi Proton termasuk VW.

Selain VW, beberapa syarikat automotif tempatan termasuk Kumpulan Naza, DRB-Hicom dan Kumpulan Mofaz menunjukkan minat mengadakan pakat strategik dengan Proton yang memasang Honda dan Suzuki.

“Kita memerlukan pakatan strategik,’’ kata Pengarah Urusan Khazanah, Datuk Azman Mokhtar sebagai tanda bersedia berunding dan mengurangkan tekanan kepada pihak yang berminat menjadi rakan kongsi Proton.

“Kami bersedia mengkaji daripada aspek kawalan terhadap bahagian tertentu perniagaan. Ia mungkin tidak disukai tetapi mungkin wajar, misalnya dalam bidang perkilangan,’’ tambah beliau.

Kebimbangan Khazanah ini bukannya tidak berasas kerana kawalan asing terhadap Proton dikhuatiri boleh menjejaskan identiti Proton yang ditubuhkan pada 1983 oleh Dr. Mahathir yang ketika itu merupakan Perdana Menteri keempat negara.

Matlamat penubuhan Proton ialah bukan sahaja memberi peluang kepada semua rakyat jelata mampu memiliki kereta nasional tetapi juga memacu ekonomi negara ke tahap negara perindustrian.

Malangnya, masalah yang membelenggu Proton ialah daripada segi kualiti pembikinannya menyebabkan ia sukar mempertahankan pengguna setia selain ketiadaan model baru yang segar dan memenuhi selera ramai.

Kualiti kereta Proton yang rendah boleh dianggap antara penyebab penjualannya jatuh sebanyak 40 peratus daripada 183,824 unit kepada 110,358 unit tahun 2006 yang disebabkan persekitaran pasaran yang lebih kompetitif.

Lebih memburukkan keadaan ialah aliran tunainya yang pernah berdiri megah pada RM3 bilion, hari ini menyusut kepada RM461 juta sahaja.

Maka rundingan dengan VW memang menjadi tumpuan ramai kerana semua pihak yang berkepentingan dalam Proton dan rakyat Malaysia menunggu hasil rundingan itu.

Jika rundingan dengan VW gagal sekalipun, semua pihak berharap dalam tempoh tiga bulan lagi Proton tetap tidak ada pilihan, perlu memuktamadkan siapa bakal rakan strategiknya.

Porsche officially files for takeover bid of VW

Reuters is reporting that today, Porsche has politely asked the European Commission if it can take over Volkswagen. The short filing by Reuters goes on to state that the Commission has until July 2nd to either give the green light or look into the matter further. Naturally, we'd expect the E.C. to take its time on the matter. Porsche's ultimate plan appears to involve taking over Volkswagen without being forced to buy all of its shares. A 47-year-old German law currently prevents a Volkswagen takeover, but the European Union is reportedly considering a repeal that would open the door for Porsche to make its move.

[Source: Reuters]

PM to meet VW heads to discuss possible Proton tie-up

Prime Minister Datuk Seri Abdullah Ahmad Badawi said that he will meet with Volkswagen's top officials in hopes of wrapping up talks on a foreign alliance for national car maker Proton.

"I am waiting,'' Abdullah told reporters.

"I am expecting (them) to come anytime.''

He did not elaborate.

The Malaysian government missed a self-imposed deadline Saturday to finalise a strategic partnership for loss-making Proton with a foreign company.

The government is in talks with Volkswagen AG and General Motors Corp., the two remaining foreign contenders after France's PSA Peugeot pulled out last month.

"At the level of the officials, (the talks are) nearing completion,'' Abdullah said.

"We want to conclude the talks as soon as possible.''

Malaysia's government owns around 43% of Proton through its investment arm, Khazanah Nasional Bhd, and has stressed the need for foreign expertise, preferably via a stake investment, to revitalise Proton.

Over the past seven years, Proton has seen its market share plunge from nearly 60% to 32% in Malaysia, Southeast Asia's biggest new passenger car market with about half a million units sold each year.

Proton, which has set its sights on becoming a significant exporter of cars, reported a net loss of RM281.5mil (US$80mil; euro 61mil) for the quarter ended Dec 31, 2006, from a net profit of RM86.5mil a year earlier.

For years, the company thrived in a protected environment, which included high taxes on foreign cars that made many Malaysians to buy Proton cars.

But the taxes have been slowly lowered in line with a regional trade agreement, and some Malaysians have sought out imported vehicles. - AP

PM to meet Volkswagen over Proton

KUALA LUMPUR: Prime Minister Datuk Seri Abdullah Ahmad Badawi is expected to meet top officials from Volkswagen over the future of national automaker Proton, a senior official said.

“A high-level meeting is expected soon. It is being arranged,” the official who is familiar with the talks on a possible tie-up said yesterday.

The official, speaking on condition of anonymity, said the meeting would take place here.

Abdullah has said Malaysia may allow Volkswagen to gain a controlling stake in Proton, a move that would help improve the fortunes of the company.

The planned meeting comes as Malaysia missed a Saturday deadline to name a strategic partner for Proton, whose controlling shareholder is state investment arm Khazanah Nasional, which holds a 42.7% stake. – AFP

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

13-03-2007: German envoy hopeful of VW-Proton breakthrough

German envoy to Malaysia, Herbert Jess, is hopeful of a breakthrough in talks between Volkswagen AG and Proton Holdings Bhd after two years of negotiations between the two carmakers, despite earlier setbacks.

"I cannot comment on what the Malaysian government is doing or willing to do. There is still preparedness of Volkswagen to come in (as a strategic partner) if the terms are right," he told reporters on March 13.

On chances of Volkswagen becoming the strategic partner following the pull-out of Peugeot PSA, he said: "If the negotiations proceed satisfactorily, it will come to a deal. If not, the deal will not be reached."

Speaking in Kuala Lumpur on March 13 after attending the launching ceremony of new initiatives between the German-Malaysia Institute and its industry partners, Jess said he was hopeful that bilateral trade relations between the two countries would continue to improve.

He said Germany was Malaysia's biggest trade partner in Europe with two-way trade volume between both countries valued at about RM30 billion last year. Germany was also Malaysia's ninth largest trade partner.

"Last year, Germany's trade with Malaysia was double of its trade with Thailand and Indonesia," he added.

On Germany's investment in Malaysia, he said Germany's electronics company, Infineon and petrochemical giant BASF had invested 1.2 billion euros in Malaysia.

Among the factors that attracted German investors to Malaysia was Malaysia's political and economic stability and the development in Malaysia, Jess said.

On the German-Malaysia Institute's (GMI) new initiatives, GMI managing director Yusoff Md Sahir said they were part of efforts to upgrade its training programme with new technology and techniques.

Under the initiatives, GMI has signed up with 16 industry partners consisting of companies such as Asea Brown Boveri Malaysia Sdn Bhd.

Among others, these companies will provide expertise and equipments at an attractive rate for training purposes.