Date posted: 03-23-2007

WOLFSBURG, Germany — Volkswagen is within days of taking control of ailing Malaysian carmaker Proton, according to a report in the Financial Times newspaper, which cites comments made by the company's head of international sales, Kevin Rose.

The German carmaker, which controls Audi, Bentley, Bugatti, Lamborghini, Seat and Skoda, has been courting financially embattled Proton for more than a year as a means of establishing a cost-effective production base for the assembly of a new low-priced sedan for sale within the Asian region.

Speaking about the state of the heavily cloaked negotiations, Rose told the Financial Times that Volkswagen is now "very close" to establishing a deal for a majority stake in Proton. He also suggested contracts between the two companies could be rubber-stamped by the end of the month.

Proton is 52 percent owned by the Malaysian government, but its sales have been heavily affected by a loosening on import tariffs that has increased the competitiveness of rival car brands. Its 2006 sales are expected to be around 120,000, with its share of the recently deregulated Malaysian market falling to 36 percent.

Volkswagen is being cagey about its plans for Proton, but it makes no secret of the fact that it is seeking to gain a foothold in the potentially lucrative Pacific Rim market. Its main aim in the deal, according to financial analysts, is Proton's production facilities. At this stage there is no indication if Volkswagen would continue production of Proton models, or if there are plans to base future Proton models on existing Volkswagen components.

Lotus, which is owned by Proton Holdings, is not thought to be part of the deal, although insiders suggest Volkswagen could also be persuaded to pitch for the British-based sports-car specialist as a means of bolstering its engineering expertise.

What this means to you: Volkswagen is on the rebound and, with new management in place, now seems more intent than ever on making the long-sought-after Proton deal stick.

Source: http://www.edmunds.com/insideline/do...ticleId=120102

 

I come from the country where Proton's are made!

Their cars have very good handling, the GEN.2 & Perdana are my favorites in the Proton line up.

While the quality of the cars for the local market is crap, the export models have better quality, features & is cheaper.

I wouldn't mind getting a GEN.2 down under, as it will make a unique project car.

 

*gets on knees* Please God, let Lotus NOT be part of the deal!!!