So the PM has said one thing and Khazanah Nasional has said another. The best way to know if the Volkswagen talks are on or not is ask Volkswagen right? It appears that Volkswagen is still talking to Proton, and is preparing something to reopen discussions with Proton again. This piece of news comes from a Volkswagen spokesperson, however it’s not known what discussions are these, and whether it will involved a stake transfer, or just some form of cooperation.

However, whether the cooperation involves a stake or not is going to be irrelevant to who will be managing Proton as the government has said it will never hand over control of Proton to a foreign company.

“We are seeking a strategic partner to have a firm collaboration of the strengths of both Proton and the partner, and we believe this will enable Proton to become more competitive. A collaboration must be in line with our thinking and our position, otherwise there cannot be an agreement. What this means is that we will not simply hand over Proton, we have our stand that a prospective strategic partner must accept,” said Deputy Prime Minister Datuk Seri Najib Tun Razak.

Let’s stop for a moment and have a look at where Proton’s thinking and position has gotten it so far. Do we really want to stand by that position?

Responding to the earlier call by the PM to stress on the importance of Proton turning itself around soon, Khazanah Nasional says all issues should be sorted by the end of 2007. Khazanah Nasional has met up with the PM and briefed him on what’s going on with the talks with Volkswagen and other parties like General Motors.

Khazanah Nasional wants to work with a partner through a strategic alliance – basically selling some equity is possible, and are willing to look at the control of certain parts of the business such as manufacturing, which would benefit the most from a foreign partnership. I am sure Proton has it’s product planning sorted out under this new management – they have Bob Hall after all, and he’s certainly not an idiot. His team should be equally capable. I believe most of the “misses” rather than hits are projects from the old management. The products are going to come soon, but if manufacturing does not put them out properly, no one is going to buy them.

There is some kind of plan B in Khazanah’s books – if there is no strategic partner to be found at the end of all the talks – product pricing. It will make “recommendations” to the government accordingly. I have a really bad feeling about this… the only way to make Proton products more competitive through pricing alone is to make Proton cars cheaper, or everyone else more expensive. Go on, try to guess which one is more likely?

Anyway, there is some hints in the media that the new talks between Volkswagen and Proton will be about something new, and with the recent rumour of an Indonesian Volkswagen base instead, I really believe there is some amount of chance that Volkswagen will be using the PT Proton Tracoma Motors plant in Indonesia. It’s just what I see with the few vague pieces of puzzles I’m trying to put together.

Source: Bernama, The Star

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