According to a statement from Proton Holdings, the OEM's partnership talks with Volkswagen have now ceased. The company noted that potential collaboration was scrapped because the German carmaker had other priorities to focus on.
"Talks that might have been taking place recently have not proceeded anymore and there will not be further talks," Volkswagen spokesman Peik Von Bestenbostel told Bloomberg.
This is the second time the companies have abandoned talks. In November 2007, Proton ended more than 12 months of negotiations with Volkswagen to give itself more time to reverse five quarters of losses.
The news sent Proton shares down 5.7 percent, the most in more than 13 months in Kuala Lumpur trading. On April 27, 2009, Proton shares fell by 8.5%.
Proton said in a statement that it "acknowledges" the decision made by Volkswagen and plans to push on with collaborative works with Mitsubishi and remains committed to expanding into China in the near future with Youngman Automobile Group.
Proton is seeking foreign partners to help bolster exports and develop new models to compete with Toyota Motor Corp and Honda Motor Co in its home market. "Proton needs to secure a strategic alliance in order to optimise their plants' utilisation and ensure long-term survival," to quote a research report by RHB Research Institute Sdn.
It is also discussing possible technical alliances with Renault SA and the former General Motors Corp. to help it make new models, Proton said in April 2009.
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