Volkswagen In Talks With Malaysia's Proton On Partnership

It simply had to come! Proton, the local car manufacturer in Malaysia started to lose marke share, especially against foreign car makers, but also foreign competition.

The cars were useful but the brand had the stigma of bein protected, not good enough and "we switch to other brands when we can."

Every now and than, there was the discussion of a takeover by a foreign carmaker. ranging from Ford to DaimlerChrysler. When Mitsubishi Corporation sold their stake in Proton in the beginning of this year, talks heated up, but were, as usual, rejected (http://asiabusinessconsulting.blogspot.com/2004/04/who-will-get-proton-in-malaysia.html).

Malaysia is one of the biggest car markets in Asia, but its locational advantage was dampened as the market was or still somewhat is, and many of the larger car companies decided to settle in Bangkok - which is also called the Detroit of the East.

Now, it appears that Volkswagen of Germany is in hot discussions about a potential partnership. Volkswagen itself faced a bit of a problem with their brands recently, and is losing market share in China, where it was or still is, one of the biggest car makers. It would be an interesting tie-up, for sure, but may be also critical, since both are companies that struggle to move up the value chain.