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Malaysia Sets December Deadline For Proton Acquisition

Troubled Malaysian automaker Proton is by the end of the year, the official said
looking for a helping hand and the that "that is a reasonable target".
Malaysian government is doing its best to In the past, Proton is the largest
get the largest European automaker automaker in Malaysian auto market. With
Volkswagen AG to invest in Proton. Three the backing of the Malaysian government,
rounds of talks have been going on the automaker was able to offer vehicles
between the Malaysian government which which are priced significantly lower than
owns the majority shares of Proton and their competition. But last year,
the German automotive giant. After these Proton's title as the largest Malaysian
rounds of talks, the Malaysian government automaker was taken away by Perodua.
is confident that they may close the deal Although the latter focuses on the
with Volkswagen this year. development of small compact cars, the
A top official in the Malaysian buying trend in the Malaysian auto market
government said that they are looking to shifted to small cars. One of the most
close the deal by December this year. formidable opponents of the automaker is
The deal is expected to give Proton the Toyota which is expanding its operations
boost that it needs to compete well with in Malaysia.
its competitors in the Malaysian auto With market shares dwindling, the
market. It is common speculation that Malaysian government now looks to partner
Volkswagen will be marketing Proton Proton with an automaker that has the
vehicles out of the Asian country while resources and the reputation that can
Proton will give Volkswagen a stronger turn around the fate of the Malaysian
foothold in the Malaysian auto market. automaker. Volkswagen has been known for
Nor Mohamed Yakcop, second finance its aesthetically excellent cars and
minister, said: "The good news is we are reliable parts such as VW radiators and
still talking. Things are happening. such. The German automaker also has the
Discussions are on-going (and) hopefully capital to invest in the Malaysian
we will resolve it soon." When asked automaker.
whether the negotiation will be completed




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