Tuesday, August 7, 2007, posted by Auto Rider at 9:56 PM

The reason is that the Malaysian government is looking to close a deal with Volkswagen AG that will see the German automaker purchasing majority of the shares in Malaysian automaker Proton.

Aside from Volkswagen, General Motors is also reportedly interested in the acquisition of the Malaysian automaker. Although the American automaker has expressed its interest in the Asian automaker, the Malaysian government is looking to sell their share to Volkswagen.

According to reports fro the Malaysian newspaper, the European automaker will have to shell out “a few hundred million ringgit” for 51 percent of the Malaysian automaker. This amount is only expected for the initial capital that Volkswagen will have to pour into Proton. With Volkswagen posting increased sales in Europe and the United States as well as their increasing presence in the growing Asian auto market would mean that the automaker has the financial stability to save Proton in the brink of bankruptcy.

The apparent preference of the Malaysian government to Volkswagen is given more credential as Malaysian the Edge newspaper reported that Volkswagen will be examining “certain assets” of Proton. Aside from having the backing of the Malaysian government in marketing Volkswagen vehicles in the country, it can also be expected that Volkswagen will widen their offering around the world by marketing Proton vehicles in the global auto market.

Labels: , ,