Malaysia's Proton Partners with VW

Malaysian national carmaker Proton said Tuesday it had agreed to enter a partnership with Germany's Volkswagen but there were no plans for Europe's biggest car maker to take a stake in Proton. In a statement to the stock exchange, Proton said the memorandum of understanding signed with VW was to "establish a long-term partnership which allows each party to exploit the strengths of the other." As part of the deal, Proton will manufacture selected VW models for sale locally and abroad, and will be the national distributor of VW cars in Malaysia, it said. In return, VW "will allow Proton access to its engines and other components and shall support Proton in adapting engines and gearboxes" for use in Proton cars. VW will also develop a program to boost production standards at Proton plants and its major vendors. At the same time, VW will study opportunities to utilize Proton's technical expertise and facilities for the joint design and development of cars, Proton added. In Frankfurt earlier, VW said it had "no plans" to take a shareholding in Proton and that both parties would "retain their full corporate independence" despite their new strategic partnership. (AFP)