Volkswagen: Proton may sell stake to Volkswagen

Bloomberg is citing Malaysian Prime Minister Abdullah Ahmad Badawi that Proton may sell stake to Volkswagen.

"The question is what is an appropriate percentage of the equity," Abdullah said in an interview yesterday in Kuala Lumpur. Proton will complete talks this year to develop new car models with Volkswagen, he said.

The stake would give Europe's largest carmaker Volkswagen its first factory in Southeast Asia, a region with about 550 million people. Proton would gain a partner with the technology to help stem a five-year sales slump, replacing Japan's Mitsubishi Motor Corp., which ended its alliance with the Malaysian automaker in January.

An investment in Proton "is a step in the right direction" as it may boost the German carmaker's commitment to the alliance, said Vincent Khoo, head of research at Hwang-DBS Vickers Research in Kuala Lumpur.

Proton's shares rose to an eight-day high of 8.55 ringgit at the 12:30 p.m. trading pause on the Malaysian exchange. The stock has fallen 5.5 percent this year, lagging behind the 2.1 percent gain in the key Kuala Lumpur Composite Index.

They also have interesting background information about Proton, its history and the Malaysian car market. Worth to read!

GermanCarBlog, Volkswagen, Proton

Source: Bloomberg, logos by Cartype

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