Proton lost to its rival

According to a report by The Edge, talks between car maker Proton Holding Bhd and Europe's largest car maker, Volkswagen AG - and maker of renowned Volkswagen Van parts --- that have began last year have not been pushing through according to what the Malaysian government is hoping for.

The weekly newspaper has reported that officials from Proton and Volkswagen had several times but with no concrete agreement has been developed. The newspaper also added that the talks have not been going well and that it seems like the auto maker Germanwings has somewhat "cooled off" and appeared less eager lately.

The newspaper has also quoted a source familiar with the situation saying as, "This delay could reveal some doubts." The Malaysian government is also under pressure to announce details of loss-making partnership for Proton, which has lost its status as the country's biggest-selling car maker rival Perodua. The government believes that news of Proton's partnership with Volkswagen can help it to recover.

Last week, Proton announced its third consecutive quarter of losses which it blames on increased competition and sluggish sales. The company obtained a net loss of 281.45 mln rgt for the third quarter ended December compared to the net profit it has made a year earlier to 86.51 mln rgt amount.

The second Minister of Finance Nor Mohamad Yakcop said that the government would release an announcement on the Proton's strategic partner this month. Nobody knows Whether it would still be Volkswagen or some other company. But according to The Edge newspaper, "If this schedule is adhered to strictly, sources say General Motors, the world's largest automaker, could well become the partner of choice for Proton."

The main objective of Proton having partnered with a foreign automaker is foreseen to prevent another decline in its market share as competition heats up. It should be noted that when news of a possible partnership with Volkswagen have leaked out the shares of Proton has increased but after the news of the partnership was not confirmed whether the Proton shares plunged.

Aside from Volkswagen, Proton has also been in talks with GM and PSA Peugeot Citroen of France plus some three Malaysian automotive firms that have expressed interest in purchasing the stakes in the company. It should be noted that the Malaysian government owns 59 percent of Proton including a stake of 43% held by Khazanah Nasional, the investment arm of the government.

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Growing up with three brothers, Natalie Anderson became exposed early to the world of automobiles. This 29-year-old account manager now dreams of having her very own top-of-the-line vintage car.