GM wants to revive its partnership with Proton

Article by Christian Andrei, on December 9, 2011

Two insiders said that talks have started between General Motors Co. and Proton Holdings to create a manufacturing venture in Malaysia, where Proton is the top automaker. The sources said that the parties resumed negotiations that were terminated in 2007. Still, these are only preliminary talks and there’s no certainty that it will result to a deal.

Under this deal, GM would be able to expand its car production beyond Thailand, which has been experiencing floods in nearly 70 years.

In the past, Proton’s alliance talks with Volkswagen and PSA/Peugeot Citroen have failed. With this new deal, Proton will get access to GM technology that would aid it in increasing exports. Alexander Chia, an analyst at RHB Capital Bhd. in Kuala Lumpur, said that Proton offers “immediate availability of production capacity." He added that currently, all of GM’s Southeast Asia interests are in Thailand.

He believes that GM is considering distributing risk and growing into other markets. When interviewed, GM spokesman Klaus-Peter Martin declined to comment. Proton doesn’t comment on speculation, according to Izad Raya, the head of group communications at Proton, which is the owner of sports-car maker Lotus Group International Ltd.

The sources said that GM doesn’t have any interest in purchasing the controlling 43% stake in Proton held by Malaysian sovereign wealth fund Khazanah Nasional Bhd. Since ending the alliance with Mitsubishi Motors Corp. in 2004, the Malaysian government (which controls Proton through Khazanah) has been looking for a partner for the automaker. [source: BusinessWeek]

Topics: vw, proton

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