PROTON TO ANNOUNCE STRATEGIC ALLIANCE WITH A GLOBAL OEM SOON

BY D. ARUL RAJOO

BANGKOK, Dec 2 (Bernama) -- Proton's talks with a global original equipment
manufacturer (OEM) for a strategic alliance is underway and the national car
maker is confident of clinching a deal soon, Managing Director Syed Zainal
Abidin Syed Mohamed Tahir said Wednesday.

"We are clear on what needs to be done (our future plan)...the biggest
question everyone is asking is on the strategic alliance. Discussions are
underway, hopefully we can make an announcement soon," he told the Malaysian
media on the sidelines of the Thailand International Motor Expo here.

Syed Zainal Abidin said once the specific collaboration with the global OEM
was announced, he was confident it would bring better future for Proton,
Malaysia's national car manufacturer, not only in the Malaysian market, but also
other markets where Proton was already in or going to enter.

He, however, declined to identify the OEM involved or whether German auto
giant, Volkswagen, was the company Proton was talking to.

Syed Zainal's latest statement was the clear indication of Proton forming a
partnership with a global player after months of speculation on its future,
especially with reports that some local companies like DRB-Hicom was keen to
take over.

There were earlier reports that Volkswagen would form a strategic
partnership with Proton and assemble its vehicles at the national carmaker's
second plant in Tanjong Malim.

Volkswagen Group Malaysia Sdn Bhd Managing Director Andreas Prinz had said
before that the group was also thinking of making Malaysia its hub for parts
distribution in South East Asia.

Malaysian Government investment arm, Khazanah Nasional, the largest
shareholder in Proton, aborted talks with the world's fourth largest carmaker in
2007 as it was not keen to let the German manufacturer to take over management
control of the national carmaker.

Proton officials were tight-lipped when asked on the potential partner or
whether other players like General Motors are also negotiating with them.

Global players' interest in Proton resumed after the Malaysian Government
unveiled the National Automotive Policy in October that aimed to liberalise the
automotive sector.

Last week, Proton Holdings Berhad announced 77 per cent increase in pre-tax
profit of RM100.65 million (US$29.8 million) for the second quarter ended Sept
30, 2009 against RM56.61 million (US$16.76 million) in the same quarter last
year.

In the 2008-2009 financial year, the national carmaker sold 108,405 Proton
cars in the country and exported 18,426 units.
-- BERNAMA