MONDAY, JANUARY 15, 2007
9:34 MECCA TIME, 6:34 GMT
GM eyes stake in Malaysia's Proton
Proton, Malaysia's first national car project, is struggling with
falling market share [EPA]
A Malaysian government minister has confirmed that the world's largest
automaker, General Motors, has "shown interest" in a tie-up with
Proton, the country's ailing carmaker.
Proton, which is losing money and market share amid competition from
local and foreign automakers, has been looking to reverse its fortunes
with a foreign partnership.
European automakers Volkswagen and Peugeot have also shown interest in
working with Proton, which is 43 per cent-owned by the government
investment arm, Khazanah Nasional.
"Their interests come in different forms, different proposals," said
Nor Mohamed Yakcop, Malaysia's second finance minister.
"So we have to see what is best for us, for Proton.''
PROTON
Proton was set up by Malaysian government in 1983
National car project backed by then PM, Mahathir Mohamed, as part of
vision for Malaysia to become a fully developed country by 2020
Proton current share of Malaysian market about 31 per cent, down from
peak of 65 per cent despite continued government subsidy
Net profit in 2006 of $14m, down from $131.8m in 2005
GM sold approximately 9.2m vehicles worldwide in 2005
Proton sold roughly 153,000 vehicles worldwide in 2005
Proton is expected to name a strategic partner for its manufacturing
operations by March.
The carmaker it looking to a tie-up to help it address sagging sales
and for assistance developing new models.
US model
Gaining a stake in Proton could help foreign carmakers consolidate
their position in Asia's booming automotive market, as Proton has an
underutilised auto plant.
Earlier this month the Malaysian Business Times reported that GM's
proposal would include helping Proton build a car for the American
market within five years.
Chartchai Suwanasevok, director of public relations for GM
Asean/Thailand, neither confirmed nor denied the reports when
contacted last week.
"What I can tell you right now is that we consider Malaysia an
important market and we frequently meet with other automotive
companies to discuss areas of mutual interests," he told Al Jazeera in
an email.
Proton's losses are expected to widen after the company reported a
$71.5m loss in the three months that ended September 2006 because of
lower car sales and rising expenses.
Analysts say a foreign tie-up would provide Proton with technology and
access to the international market and is essential to Proton's survival.
Source: Al Jazeera Agencies
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