Although the Malaysian government has taken its 43% stake in Proton Holdings Bhd off the market, General Motors Corp. reportedly remains interested in the troubled carmaker, according to Southeast Asian press reports. Before the government abruptly ended the auction last week, GM and Volkswagen AG were the primary bidders with the German company as the frontrunner.
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The rumor of a GM bid first surfaced when the government began the auction earlier in the year. Although, Proton is a tiny player in the international auto market, only producing 100,000 cars, a purchase or venture would give GM manufacturing capacity for right-hand drive vehicles and market share in the growing Southeast Asian country. However, the company only exports 20% of its production, mostly to other right-hand drive markets like the U.K., Australia and New Zealand. Its other export is the Italian inspired Lotus sports car line.
Proton's fortunes vaguely resemble GM's. The company, which was started in 1983, has lost ground as internal and foreign competition grew in the early part of the decade. The company's domestic market share reportedly has fallen from 60% in 2002 to 30% in 2005. — Matthew Wurtzel
See story from Reuters
See earlier story from Dealscape
See Proton's Web site
