Prime Minister Abdullah Ahmad Badawi said yesterday that Proton will sell stake to Volkswagen AG yesterday, causing Proton shares to go up as much as 3.6 percent to an eight-day high of 8.55 ringgit.

Volkswagen wants to lessen it’s dependance on China, where it’s market share fell from 2/3 in 1985 to just 18 percent now. If the deal goes through, Volkswagen will get it’s first factory in South East Asia.

However both parties did not quote any details so far and said talks were still being held.

In other news, the government has promised that the National Automotive Policy will be unveiled in November. I think they originally said end of September.

Source: Bloomberg