More talks good news for Proton

  • Business
  • Thursday, 14 Jun 2007

KUALA LUMPUR: News of a second round of talks within a few days of the initial meeting in New York is seen by analysts as a positive development for Proton Holdings Bhd to eventually ink an alliance with German giant Volkswagen. 

Market expectation is that a deal could be done within a few short weeks as the parties are familiar with each other and know just what the shareholders of Proton require and what the company can offer in any partnership. 

“There seems to a better understanding of what needs to be done to seal this,'' said an analyst. 

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced on Tuesday that discussions with Volkswagen on a rescue plan for Proton had been fruitful. 

“The fact that they want to have another round of discussions means that both sides are happy with the first results. Both sides are in positive mood,” he said. 

Analysts say the nod for further talks in Bangkok could mean that Volkswagen will be agreeable to Proton's long-term blueprint. 

Such an alliance could see Proton maintain its branding and keep its presence in key markets in South-East Asia. 

“The Proton brand will be in a position to gain market share and products,'' said an analyst. 

Once a deal is struck, Volkswagen would be able to bring to Proton a multitude of benefits, and key among the gains is products and technology. 

With an attractive line-up of models, Proton would be able to take advantage of Volkswagen's platforms and the development of new cars, improve the quality of its vehicles and utilise the spare capacity of its plants. 

Analysts believe the partnership would adopt a similar model undertaken by Perusahaan Otomobil Kedua Sdn Bhd (Perodua), where the foreign party will control manufacturing activity. 

In the Perodua model, sales and marketing are handled by the holding company. 

 PROTON :  [Stock Watch]  [NewsPROTON-C :  [Stock Watch]

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