Malaysia’s Proton on new path with VW

KUALA LUMPUR – Proton’s tie-up with Germany’s Volkswagen AG (VW) heralds a new chapter for the Malaysian national carmaker but analysts warn the road ahead is bumpy and long-term benefits are hazy without any equity participation by Europe’s top auto maker.

Proton announced last week it would assemble and sell VW cars as part of a “long-term strategic partnership” that could lead to technology sharing and joint development of cars. However there were no plans for VW to take a shareholding in the 38 per cent state-owned Proton.As part of the deal, Proton gets access to VW engines and other components.VW will develop a program to boost production standards at Proton plants and study opportunities to utilize Proton’s technical expertise and facilities for the joint design and development of cars.Analysts say Proton’s technical collaboration with VW after the end of a 21-year alliance with its Japanese partner Mitsubishi Motors would bolster its competitiveness ahead of market opening in January under the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA).The tie-up with VW will boost Proton’s brandname internationally and create a global distribution link for it to sell its cars abroad, especially in China where VW is the top foreign carmaker with nearly 30 per cent of the market, they say. -Nampa-AFPHowever there were no plans for VW to take a shareholding in the 38 per cent state-owned Proton.As part of the deal, Proton gets access to VW engines and other components.VW will develop a program to boost production standards at Proton plants and study opportunities to utilize Proton’s technical expertise and facilities for the joint design and development of cars.Analysts say Proton’s technical collaboration with VW after the end of a 21-year alliance with its Japanese partner Mitsubishi Motors would bolster its competitiveness ahead of market opening in January under the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA).The tie-up with VW will boost Proton’s brandname internationally and create a global distribution link for it to sell its cars abroad, especially in China where VW is the top foreign carmaker with nearly 30 per cent of the market, they say. -Nampa-AFP