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VW & Proton deal on shaky ground
Looks like the talks between Proton and Volkswagen aren't going as well as they could... again. Both companies have said that talks are continuing, but The Edge business newspaper is reporting that no agreement appears likely in the near future. They reported that VW has been "less keen" about the deal lately. The first round of deal breaking news came in December but things appeared to be back on track since then. Seems like there have been a lot of delays in the negotiations, fueling rumors of some discord, even though VW has already signed their letter of intent to purchase 51% of the company. The deal itself involves the manufacturing part of Proton, which is Malayasian owned. VW is looking for additional production capacity for its Passat sedan to help with Japanese exports. Malayasian built Passats would avoid the Japanese tariffs because of a free trade agreement between these two countries. And even better news for Volkswagen is the fact that Malaysia is also working on free trade deals with Australia and the U.S. So they could also increase manufacturing there in the future for export to those markets as well.
Other companies are still showing interest in Proton, including three Malaysian firms. Some industry insiders even say GM is going to throw its hat into the ring. Another automaker that had been involved in the bidding was PSA Peugeot Citroën, but it has announced that it's no longer interested.
[Source: Motor Authority]
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Reader Comments (Page 1 of 1)
fauzi 2:25PM (3/05/2007)
I am a malaysian and malaysians are paying thru the roof for shoddily made proton cars and all because of the need to protect this proton. I hope this deal will fail and so does proton.
Proton will fail because decisions are made by bloody stupid politicians who are protecting thier own self-interest. It's about time Malaysians drive decent car.
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Mattlach 2:16PM (3/05/2007)
Interesting.
This is the first I have heard of this potetial deal. Sure, VW stands to benefit greatly from using Asian labor/benefit rates, and reduced/no export tariffs, but the most interesting part - I think - is what happens to Lotus...
As I recall Proton owns Lotus these days, right?
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TDIMeister 3:28PM (3/05/2007)
This on-again, off-again by VW and Proton unfortunately leaves Lotus in limbo and does no good for my job application. :(
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John P. 6:28PM (3/05/2007)
not to say I told you so, but as I stated before, doing any kind of deal with proton (basically the malaysian govt.) is going to be nothing but problems. I pity the company that ends up with the scraps that is proton.
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Barney 11:43PM (3/05/2007)
There is no real "free trade agreement". The moment one side see's a disadvantage, they apply tariffs any way. VW may see the lack of advantage.
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tariq 8:34AM (3/06/2007)
chrysler+proton
they should merge after mercedes throws chrysler away/
maybe lotus can then help chrysler design better looking sebrings.
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