| The shares of the troubled Malaysian carmaker | | | | invest few hundred million ringgits to get |
| Proton has increased slightly last Monday | | | | the company started. |
| after reports has come out that its deal with | | | | |
| Europe's largest automaker and producer of | | | | Proton's state investment arm Khazanah |
| top-of-the-line quality VW Beetle parts is | | | | Nasional is the controlling shareholder in |
| getting closer to a deal. | | | | proton owning 42.74 percent stake. Meanwhile |
| | | | the state pension fund EPF and the national |
| Analysts said that such positive news matched | | | | oil firm Petronas have a share of 12.07 |
| with a plan of the government to remove cars | | | | percent and 8.84 percent respectively. |
| that are 15 years old and older have lured | | | | |
| investors to the company. According to the | | | | Khazanah's Managing Director Azman Mokhtar |
| Edge business newspaper last Monday, | | | | has set the end of this year as the deadline |
| "Malaysian representatives of Proton's | | | | for the completion of the deal with |
| stakeholders have inched closer to a final | | | | Volkswagen. |
| deal with Volkswagen." | | | | |
| | | | Analysts have also attributed the increase in |
| Proton's shares were up by 0.05 ringgit or | | | | Proton shares to government programme which |
| 0.86 percent and close at 5.85 ringgit after | | | | will scrap old cars giving Proton the |
| reaching as high as 6.10 ringgit in late | | | | opportunity to increase its sales. According |
| trade. | | | | to the Edge business magazine the said |
| | | | programme was aimed to boost Proton's sales. |
| Volkswagen met with Proton for the third time | | | | Quoted on the magazine: "It has been decided |
| in Germany recently after its earlier | | | | that those who voluntarily scrap their cars |
| meetings in Thailand and the United States. | | | | will be offered a subsidy to buy a new Proton |
| The foreign tie-up with Proton is very | | | | car. The subsidy will be on a scale with a |
| important for the Malaysian automaker in | | | | maximum of 5,000 ringgit." |
| order for it to stop the decline in its | | | | |
| market share and to stop incurring further | | | | Last Monday Aseambankers has also expressed |
| losses. | | | | its plan to reinforce Proton's share price |
| | | | and was quoted by the Edge saying, "although |
| The Edge business newspaper has also pointed | | | | we remain cautious of Proton's ability to |
| some details of talks wherein Proton will | | | | deliver more than marginal profitability." |
| still be controlling its domestic | | | | |
| distribution network while Volkswagen will | | | | It can be noted that Proton has lost its |
| take care of the international distribution. | | | | status as Malaysia's biggest-selling |
| | | | automaker to its rival Perodua and just |
| The Edge has also stated that Volkswagen may | | | | recently has reported net losses reaching as |
| be required to cash out for its 51 percent | | | | high as 591.36 million rinngit or $172.4 |
| equity in Proton. Volkswagen will have to | | | | million through March 2007. |