Malaysia says still talking to GM on Proton http://www.reuters.com/article/tnBasicIndustries-SP/idUSKLR15633520070402
Mon Apr 2, 2007
(Adds comment from prime minister's aide in final paragraph, share price)
KUALA LUMPUR, April 2 (Reuters) - Malaysia is still talking with General Motors Corp (GM.N: Quote, Profile, Research) about a possible tie-up with state-controlled carmaker Proton Holdings (PROT.KL: Quote, Profile, Research), Prime Minister Abdullah Ahmad Badawi said on Monday. "It's at the level of the officials. It's nearing conclusion. They have to present the full report to me," he told reporters when asked about the status of talks with General Motors. German carmaker Volkswagen AG (VOWG.DE: Quote, Profile, Research) had been seen as the frontrunner to partner Proton until last Friday, when a Singapore newspaper said those talks had broken down. The week before, the prime minister had said Malaysia was talking only to Volkswagen.
Abdullah declined on Monday to give any details on the status of talks with either Volkswagen or General Motors. The U.S. giant had been thought to be out of the running until last week.
Loss-making Proton, which faces shrinking market share in an increasingly competitive domestic market, is looking to tie up with a global car-maker to boost its overseas sales. Its main asset is a modern, low-cost production line north of the capital.
Volkswagen denied on Friday that it had broken off talks with the government, and a government source said the German firm's chief executive wanted to meet the prime minister.
But there are growing suspicions that Volkswagen will not go ahead with an investment in Proton. Once before, in 2005, Volkswagen explored an alliance with Proton but the talks failed.
An aide for Abdullah said on Monday he was still waiting for a meeting to be fixed with Volkswagen chief Martin Winterkorn. Proton shares rose 0.75 percent on Monday morning, oputpacing more modest gains for the broader Malaysian market (.KLSE: Quote, Profile, Research).
((Reporting by Niluksi Koswanage, editing by Mark Bendeich; Reuters Messaging: clarence.fernandez.reuters.com at reuters.net; Kuala Lumpur Newsroom e-mail:areuters at gmail.com; +603 2275 6840)) Keywords: PROTON/ (C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nKLR156335
© Reuters 2007. All rights reserved.