Volkswagen AG is considering expanding production in Malaysia and has dispatched senior executives, including management board members, to review Proton Holdings Bhd’s operations for a potential partnership, a person familiar with the matter said.
Europe’s largest carmaker is considering producing vehicles at Proton factories after its partner DRB-Hicom Bhd. agreed last month to buy 43 percent of Proton, the person said, declining to be identified because the talks are private.
The high-ranking executives are considering whether the plants are equipped to produce VW models as it considers creating a production hub in Malaysia to target Southeast Asian markets, the person said.
The Wolfsburg, Germany-based manufacturer has been expanding production in a bid to overtake General Motors Co. as the world’s largest automaker. VW plans to add a factory in Ningbo, China, by 2014, adding to plants being built in Yizheng and Foshan. A new U.S. assembly site opened last year in Chattanooga, Tennessee.
VW started a partnership in Malaysia last year with DRB- Hicom, which also makes vehicles for Daimler AG’s Mercedes-Benz. The two companies agreed to invest about 1 billion ringgit ($332 million) to assemble Passat sedans from parts produced at other factories.
Volkswagen has flirted with a Proton partnership in the past. The German carmaker called off cooperation talks with Proton in June 2010. The two companies also failed to reach an agreement in November 2007 after 12 months of negotiations. The partnership with DRB-Hicom was agreed in December 2010.
The Proton deal gives DRB control of two Malaysian car plants with the capacity to make a combined 350,000 vehicles per year. Proton’s vehicles are driven by taxi drivers across Malaysia and are among the cheapest cars sold in the country. The company had two annual net losses over the past five years. -- Bloomberg
Europe’s largest carmaker is considering producing vehicles at Proton factories after its partner DRB-Hicom Bhd. agreed last month to buy 43 percent of Proton, the person said, declining to be identified because the talks are private.
The high-ranking executives are considering whether the plants are equipped to produce VW models as it considers creating a production hub in Malaysia to target Southeast Asian markets, the person said.
The Wolfsburg, Germany-based manufacturer has been expanding production in a bid to overtake General Motors Co. as the world’s largest automaker. VW plans to add a factory in Ningbo, China, by 2014, adding to plants being built in Yizheng and Foshan. A new U.S. assembly site opened last year in Chattanooga, Tennessee.
VW started a partnership in Malaysia last year with DRB- Hicom, which also makes vehicles for Daimler AG’s Mercedes-Benz. The two companies agreed to invest about 1 billion ringgit ($332 million) to assemble Passat sedans from parts produced at other factories.
Volkswagen has flirted with a Proton partnership in the past. The German carmaker called off cooperation talks with Proton in June 2010. The two companies also failed to reach an agreement in November 2007 after 12 months of negotiations. The partnership with DRB-Hicom was agreed in December 2010.
The Proton deal gives DRB control of two Malaysian car plants with the capacity to make a combined 350,000 vehicles per year. Proton’s vehicles are driven by taxi drivers across Malaysia and are among the cheapest cars sold in the country. The company had two annual net losses over the past five years. -- Bloomberg
