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November 21, 2007 |
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PROTON HOLDINGS: Alliance Talks with Volkswagen and GM Collapse Malaysia's state investment arm Khazanah Nasional Berhad, which controls Proton Holdings Berhad, has discontinued negotiations with Volkswagen AG, Agence France Presse reports. As reported by the Troubled Company Reporter-Asia Pacific on Nov. 12, 2007, talks between Proton and Volkswagen regarding a possible partnership are ongoing. The TCR-AP report cited Malaysia's second finance minister, Nor Mohamed Yakcop, as expressing confidence that a deal between Proton and Volkswagen will be reached by the end-2007 deadline. Now, AFP, citing Khazanah Nasional, relates that an improvement in Proton's domestic sales and exports had led to the decision to halt negotiations with Volkswagen. Bloomberg News adds that Khazanah Nasional and the Malaysian government have “taken note of the recent positive developments” and that “Proton's management should be allowed to continue with its plans to further strengthen the company.” The Asian Wall Street Journal notes Minister Nor as saying that Proton's turnaround has been “very, very real” with Proton's balance sheet improving. Minister Nor declined to say when the company would return to profitability, although adding that “2009 could be a good year,” the AWSJ relates. Media reports further say that talks with General Motors Corp. have also been shelved. On the Lookout for Other Potentials in the Region General Motors is still interested in Proton, Bloomberg relates, citing Rob Leggat, spokesman for the Detroit-based carmaker. Volkswagen, on the other hand, said in a statement that it will expand its sales and service network in Southeast Asia, in particular within Malaysia. Bloomberg recounts that the search for a partner for Proton followed the end of an alliance with Mitsubishi Motors Corp. in 2004, and the loss of half of Proton's market share to competitors, including Toyota Motor Corp. AFP adds that the alliance talks was aimed to revitalize Proton, which experts say has suffered from stiff competition, a lack of new models and a reputation for poor quality. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/ -- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. About Volkswagen Group Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/ -- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and further seven countries in the Americas, like Mexico, Africa, and Asia. Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. About Proton Holdings Headquartered in Selangor Darul Ehsan, Malaysia, Perusahaan Otomobil Nasional Berhad or Proton Holdings Berhad -- http://www.protonedar.com.my/ -- is engaged in manufacturing, assembling, trading and provision of engineering and other services in respect of motor vehicles and related products. Its other activities include property development, trading of steel and related products, engine and technologies research, development of automotive related technologies, investment holding, importation and distribution of motor vehicles, related spare parts and accessories, holds intellectual property, provides engineering consultancy, operates single make race series and carries out specific engineering contracts. The Group's operations are carried out in Malaysia, England, Australia, Socialist Republic of Vietnam and the United States of America. Proton was reported as among Malaysia's worst performing companies in 2005, after competition from foreign carmakers and a lack of new models lost the firm local market share and subsequently led it into a loss. It has since brought in a new chief, sold its loss-making MV Agusta motorbike firm and pledged to find a new technology partner. The Company has been under increasing pressure, with its share of domestic sales falling to 44% from 75% over the past decade. The Troubled Company Reporter-Asia Pacific reported on May 4, 2006, that Proton was expected to finalize a recovery plan and seal an alliance with a strategic partner, in order to boost sales and become more competitive. |
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