Proton-VW deal could be signed in 2 weeks?

Proton LogoThis is some rather exciting news – business daily The Malaysian Reserve has a report quoting unnamed sources that Proton and Volkswagen will be signing a Memorandum of Understanding regarding a tie up involving stake holding within the next two weeks. The MoU is regarding the establishment of a new company which will own certain core Proton businesses.

Volkswagen will hold 20% of the stakeholding in this new company, but it is unknown who will hold the remaining 80%. The unnamed source also said Volkswagen would have management control of the new company, and the first project is likely to be a Perdana replacement model similiar to the Volkswagen Passat.

Proton managing director Datuk Syed Zainal denied knowing of any new developments regarding the Proton-VW deal when queried by The Malaysian Reserve.

You can pick up The Malaysian Reserve at most news stands and it goes for RM1.50. I was in Mid Valley making photocopies of some documents when I spotted the Proton headline on the front page of the paper in the news stand.

I rushed to d’lish to blog this, so this post is powered by d’lish’s tasty scones, hot tea and free internet. ;)

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • TheDuck (Member) on Nov 09, 2007 at 3:33 pm

    Is this for real???

    Anyway, 20% VW 80% should be a local GLC. i am praying its the Sime Darby Group. This way, PROTON can be liquidated and such factories are convered into efficient plants; by producing cars of better quality.

    what say u guys?

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  • akshen_kamen (Member) on Nov 09, 2007 at 3:40 pm

    i prefer petronas to take all the 80% share.petronas has modal to invest and they have technology in automotive industry,futhermore both related to automotive industry.so proton and petronas both can expand and improve their product quality.

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  • bobdbilder (Member) on Nov 09, 2007 at 4:09 pm

    Dudes awesome headliners.

    Would really love if Petronas had involvement but with the current F1 BMW deal? Have you noticed that any car in a Petronas ad would be a BMW. So, I don’t think so. It would be one of those Special Vehicle Companies like Synergy Drive is for the Palm Oil mergers. No. Not Vehicles as in automotives.

    Petronas does not have manufacturing specialists. Even now they and MISC are a bit short handed of specialists. That leaves ex-Perodua people in DRB. Yuck!

    I would say if you want to be efficient, ehem, you would do away with Worker Unions. See how electronics factories don’t have unions?

    As to Passat? Um I wouldn’t be too sure of such a high calibre machine. Better set your mind on a Fox. Also depends on what they’re shipping out of the Jakarta works. Me guess would be an FSI engined Waja. Without the T. God knows it needs the torque.

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  • najibest (Member) on Nov 09, 2007 at 4:44 pm

    while i would prefer petronas to have some share, i prefer them not to take the whole 80%.. maybe around 20-30% should be good enough.. at least petronas can use the expertise they gain in the SPE venture into something useful.. and don’t forget the engines that they have….the rest can go to deserving GLC’s that have high management standards :)

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  • akshen_kamen (Member) on Nov 09, 2007 at 4:50 pm

    one more thing,VW need to kick out all the chronies vendor in proton if they want to improve the quality.if petronas allowed proton to use their engine,they also can gain something maybe in term of royalty and marketing..

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  • tHe CuLpRit (Member) on Nov 09, 2007 at 4:53 pm

    I’ll believe the news if The Edge publishes it :-P

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  • ahmadmckk (Member) on Nov 09, 2007 at 4:53 pm

    I think the malaysian government will hold the majority of the shares of the new co., let’s say 40 % because proton is a glc. petronas can be the one of the remaining shareholders as they have experience of automobile industry(mainly from F1). If they want to make it a public co. they can sell it to the public.

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  • seperlinky (Member) on Nov 09, 2007 at 5:23 pm

    as long as the G is not in command and do not mix business with politics, i think it should be fine

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  • waimak (Member) on Nov 09, 2007 at 5:27 pm

    If it is about doing business, forget about equity ownership and controlling shares first. If it’s about who’s controlling who, then they all should fight, forever.

    Personally, I feel that business cannot mix with govenrment/ politics, no matter what. But then again, a GLC belongs to the government no matter how much equity holding is. Too bad.

    I just hope that some people learn the past mistakes and history doesnt repeat itself.

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  • auctioncenter2u (Member) on Nov 09, 2007 at 7:24 pm

    20% ONLY arr? How to improve PROTON to be better?
    Could be same as Mitsu case, Not much changes. Don’t put HIGH Hope on it!

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  • akshen_kamen (Member) on Nov 09, 2007 at 7:43 pm

    #
    auctioncenter2u said,

    November 9, 2007 @ 7:24 pm

    20% ONLY arr? How to improve PROTON to be better?
    Could be same as Mitsu case, Not much changes. Don’t put HIGH Hope on it!
    __________________________________________________________________________

    If VW gain control,proton can improve but if the G still control,we cannot see proton will improve.too much problem with our G right now.

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  • BigFish (Member) on Nov 09, 2007 at 9:21 pm

    The GLCs is the “bad syndrome” inherited from 1980s as a result of the “nationalization” of the heavy industry. It is an outdated practice (at least it was introduced by Margaret Thatcher) to mix biz and politics as both are always mutually exclusive!

    There are feasible solution for Proton if G divest from P1.

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  • BigFish (Member) on Nov 09, 2007 at 9:22 pm

    The above news if MD SZ denied have any knowledge, is likely another round of “goreng share”.

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  • acbc (Member) on Nov 09, 2007 at 9:28 pm

    Yawn… more rumours…

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  • armandd (Member) on Nov 10, 2007 at 12:12 am

    hmm, VW passat for perdana replacement? i think if the rumour is true then they’ll probably use the previous generation passat like this one..

    http://deutschstahl.com/cpg133/albums/userpics/10185/normal_side_profile.jpg

    not bad. =)

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  • topgunthang (Member) on Nov 10, 2007 at 12:27 am

    so be it. no hope for malaysia already.

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  • mystvearn (Member) on Nov 10, 2007 at 1:02 am

    I don’t get it. Or really I don’t know how Khazanah Nasional managed to do it.

    We give you 20% of company, but you are the boss. So 80% we keep. You make all decisions. Untung we also get money, you get less, but you steer company…

    Imagine what the board meeting would be like. if disagree, 20% cannot go over 80%

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  • BanyakMasukWorkshop (Member) on Nov 10, 2007 at 2:11 am

    liquidated proton? what sort of comment is that? it will never happen.

    regardless of what happens in the near future, i think proton is already making huge improvements to its business… cars are selling, cost cutting is in place, exports are growing.. seems like they’re on the right track. i find it strange that no one here who posted seemed to notice or taken into account anything thats been happening in the last 6-7 months.

    To me, this VW mou if it works out, should only help to improve proton further, and hopefully help it achieve its original dream of being a world class manufacturer.

    since malaysia and malaysians are stuck with proton whether we like it or not, i’m all for seeing a better proton for the future.

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  • ob8 (Member) on Nov 10, 2007 at 2:55 am

    yeah kick cronies out. cheap vw cars is what im interested in. then no protection of local cars. then all cars is cheaper. then all people will be happy.

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  • azrai (Member) on Nov 10, 2007 at 7:18 am

    Whatever. It seem like Synergy Drive move by estbalsihing a new company to swallow the 3 big plantation company. Is it under ECM Libra advisory a.k.a. Khairy Jamaludin? Pak Lah Pak Lah. For Sime Derby, I don’t think it will holding the remaining shares. Synergy Drive already swallow it. I don’t think continental parts can be competitively price like their Japan counterpart.

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  • aesthari (Member) on Nov 10, 2007 at 9:38 am

    Weird, this, 20% share and management control, pretty unconventional. Would be interesting to see how this works out, if it’ll ever happen at all. Rumours of agreement hasbeen around for ages only to be followed up with delays and postponements.

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  • scorpicore (Member) on Nov 10, 2007 at 10:01 am

    Let say the news is true, then this do make sense. Firstly VW does want to have management control in P1-VW partnership, secondary, to give VW to have full control of P1 will make Malaysia loses her pride! So the above idea of forming new company is still the best solution to get german car technology to be acquired by P1 and to give VW to expand their sales in malaysia, and to use malaysia as a geteway to sell their cars in SEA. However, will the German really keen to help our P1 team to acquire latest tech in car industry still remain unknown. It may end-up like P1-mitsu where only aging tech been offered. But what we can see now the partnership may benefit VW more with the management control because: 1. They can expand their sales in malaysia (as malaysian car minus taxes) and to this region, 2. They can have access to car manufacturing fascilities without much investment in building new plant, 3. They may have access or facilities of the technology owned by LOTUS. Benefit to P1 is still remain unknown.

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  • erichigc (Member) on Nov 10, 2007 at 10:29 am

    I dun trust any one, either from Proton or Petronas. What we need is a good and efficient management team together with an Excellent CEO. At least he has 50 percent quality of Tony Fernandez.

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  • punisher (Member) on Nov 10, 2007 at 11:39 am

    Proton Passat aka ..Volkswagen 4 under 100k…y not..

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  • intermilan (Member) on Nov 10, 2007 at 1:49 pm

    another transformation to change the sole beneficiary of an entity called proton from ex-PM to current PM cronies.
    Yawn…

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  • topgunthang (Member) on Nov 10, 2007 at 11:08 pm

    BanyakMasukWorkshop

    they only release news that they want you to hear. proton is doing terribly elsewhere in the world. if proton can export to some country. then u can be sure toyota, daewoo and some china car company can do the same 50-100 times over.

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  • edmund_lee83 (Member) on Nov 11, 2007 at 1:03 am

    Proton should be close lah!! Watse money company.. all shit design , if no more Proton we can drive Toyota , Honda even BMW cheaper than now. Why we must suffer to drive national car.haha~~

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  • NoToLowQuality (Member) on Nov 11, 2007 at 11:18 am

    BanyakMasukWorkshop
    “regardless of what happens in the near future, i think proton is already making huge improvements to its business… cars are selling, cost cutting is in place, exports are growing.. seems like they’re on the right track. i find it strange that no one here who posted seemed to notice or taken into account anything thats been happening in the last 6-7 months. ”

    good to know that. In the near future, we can then abolish this high tax structure and let every car company compete is a fair manner. Then the real proton news like “cars are selling, cost cutting is in place, exports are growing.. seems like they’re on the right track” is really can be on that track or not.

    Even if proton success again as number one local car and being protected by all the tax, then i can say that proton don even improve a single bit. Only when no more high tax, and proton can still sell its car locally, then is it genuine 100 % success. therefore, proton will always be look down by our generation and generation to come… cause they are protected… everyone knows it.

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  • efikz_1011 (Member) on Nov 12, 2007 at 11:08 am

    Hi,

    If the article above is true, the structure will be more like a CAPITAL VENTURE structure. This happened when 20% equity shares will be hold by VW and their entitled to have the expert management team to organise the new company whereelse 80% of shares equity will be hold by GLC. The GLC will play a part in this new company by lending big capital for the development of new company.

    The effect of this structure,

    The good news is that GLC company will gain big amount of dividen from the new company if this company success with massive profit and they will also gain repayment of lending the capital plus high interest.

    The bad news is that the GLC company will gain nothing in term of technolgy knowledge.

    This will happen once a gain like our MOU in the past with Mitsubishi where we learn nothing about engine. They only teach us how to make that ‘tin milo’ body.

    As u all can see, the history will repeat it self.

    Correct me if im wrong

    Adios

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  • Xoomie (Member) on Nov 12, 2007 at 11:37 am

    It’s just MOU laa friends…

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  • bmpower (Member) on Nov 12, 2007 at 7:49 pm

    yea.. after this sell petronas share to.. Opss.. petronas still profitable, when it had problem later.. just sell it too lah.. LIKE THAT!
    Tnb also can sell share. fast money..

    Overall.. i don’t think all of this good move.. Losing GLC company, just sell the share in the name of investor inject money..

    Do anyone here know, there’s 1 malay silent tychoon in VolksWagen AG. ( 1 biz friend told me).. But he remains mystery.. he got at least 10% share VW worldwide!.. I still searching the detail on that (because i hard to belive if nothing proven) .. some said rumours.. but it not so rumours..

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  • digiman (Member) on Nov 12, 2007 at 9:05 pm

    dum de dum… (twidling thumb)

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  • lembagatanah (Member) on Nov 13, 2007 at 9:51 am

    if this is true, so good we might have a new perdana

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  • szw (Member) on Nov 13, 2007 at 10:05 pm

    when ?

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