Proton, Malaysia's loss-making carmaker, is all set to be sold to Volkswagen, who are likely to turn it into an Asian production hub. If VW plays its cards right, it might end up controlling Group Lotus as well, since the Norfolk sports car maker was acquired by Proton in 1996.
Proton Holdings Bhd¡¯s share price fell as much as 6.7% or 45 sen to
RM6.20 in early trade on March 30 as investors reacted to news report
that Volkswagen AG (VW) had withdrawn from talks of possible tie-up.
Proton opened at RM6.60, down 5 sen from the previous day¡¯s closing price
of RM6.65. Within the first hour, there were 536,000 shares transacted at
prices ranging from RM6.20 to RM6.65. At 10am, it was trading at RM6.30,
down 35 sen.
Singapore¡¯s Straits Times reported that Volkswagen had called off the
plans for a partnership with loss-making Proton.
On March 28, the government said it might miss its own end-March deadline
to strike a deal with a foreign carmaker for a partnership with Proton.
It was earlier reported the government was in talks with Volkswagen and
General Motors Corporation towards striking a strategic partnership,
including possible equity participation in Proton.
It was also in negotiations with local players such as DRB-Hicom Bhd and
Naza group of companies on how they could play a role in reversing the
fortunes of the loss-making national carmaker