Volkswagen CEO to visit Malaysia for Proton talks

Hanover (Germany), Sep 24: Volkswagen Chief Executive Martin Winterkorn plans to visit Malaysia in the weeks ahead to discuss striking a deal with state-owned carmaker Proton, a Volkswagen spokesman said on Monday.

Winterkorn will meet Prime Minister Abdullah Ahmad Badawi to discuss the framework for Europe's biggest automaker to take a stake in loss-making Proton. An exact date for the meeting was not yet set, the spokesman said, confirming a report in Malasian weekly the Edge.

The Malaysian government has been in talks with Volkswagen, the world's fourth-largest carmaker, over the possible sale of a stake in Proton.

A person familiar with the talks told Reuters this month that Volkswagen wants to take a 20 percent stake in Proton and could increase its share to a majority.

The idea is for the Malaysian government gradually to pull out while taking on any losses during a starting phase, the source said, adding that the Volkswagen stake could be increased to 50 percent within five years.

The German carmaker has long been interested in strengthening its position in southeast Asia.

Proton, which faces a shrinking market share in an increasingly competitive domestic market, wants to tie up with a global carmaker to boost its sales and turn itself around. It expects to return to profit this financial year.

Reuters
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