Volkswagen and Proton talks on collaboration are stalled

Volkswagen and Proton talks on collaboration are stalled

Volkswagen AG were in talks with the Malaysian auto giant Proton Holdings Bhd for buying a substantial stake in the company. However, the talks have been postponed for the time being due to the opposition from the Malaysian carmaker’s senior management. This report was first released in the public by Edge weekly newspaper, which quoted unnamed sources in the company.

This delay in the talks has further led to the postponement in the proposed technical tie-up between the two companies. This tie-up was to include several projects like co-development of models in the various global markets. Volkswagen was also expecting the permission to use the Proton’s assembly and distribution channels as a launch pad for their own vehicles in the Association of Southeast Asian Nations, or Asean, market.

The problem is the size of equity Volkswagen is expected to receive in the Proton Company in return for the technical expertise and global reach they would be providing back to their expected business partners. Surprisingly, Government investment company Khazanah Nasional Bhd. favors the deal between the two companies.

Both the companies are yet to comment on this report.