Proton Achieved Highest Sale For The Year

Anthony Fontanelle
August 23, 2007

Malaysian automaker Proton has dominated the Asian country's auto market in the past. With backing from the Malaysian government, Proton was able to offer their vehicles at a significantly lower price than the competition. But in recent months, the Malaysian automaker faced its toughest problem. With foreign automakers like Toyota expanding their presence in Malaysia, the national car producer of the Asian country is in danger of plunging into more debt.

But it seems that the automaker has found a lifeline in Volkswagen. The European automaker has been in three rounds of talks with the Malaysian government regarding the possible acquisition of the majority of shares in Proton currently held by the Malaysian government. While the deal is not yet completed, Proton is already showing signs of resurgence after it posted its highest sale for any month this year last month.

According to the automaker's report for the moth of July, they have sold 44,926 vehicles for the month. That figure is 2.6 percent more than the company's sales output forte month of June this year. Compared to last year's July, the company's July 2007 sales are 9.6 percent higher. This shows that Proton is starting its resurgence.

The Malaysian Automotive Association said in a statement that the increased sale for the Malaysian automaker is the result of the higher income of civil servants. It has been reported that civil servants in the said Asian country had their wages increased by 7.5 to 35 percent. The introduction of new auto models is also a reason for the increased attention and thus sales for Proton.

The involvement of the largest European automaker in Proton may have also helped the latter's cause. Volkswagen AG, the manufacturer of Volkswagen vehicles and auto parts such as VW spark plug wires, is having talks with the Malaysian government over possible acquisition of the Malaysian automaker. Three rounds of talks have already taken place between the Malaysian government and representatives of the European automaker. A decision is expected to be reached before the end of the year.

In the recent unveiling of the new Proton Persona, it was reported that the launch was connected with the ongoing talks between the Proton and Volkswagen. But Prime Minister Datuk Seri Abdullah Ahmad Badawi cleared the issue saying: "…foreign news reporter asked if the new car would enhance Proton's standing because Volkswagen would like it that Proton has a good car."

"My reply was that talks between Proton and Volkswagen had nothing to do with the production of this car or any particular car," the Prime Minister continued.

"We are talking about some kind of general cooperation that could possibly be either on equity participation or in the form of some other kind of cooperation."

The possible acquisition of Proton by Volkswagen would mean that the latter will be pouring in money to the operations of the Malaysian automaker. It is expected that Volkswagen will be marketing Proton vehicles outside the country while Proton will aid Volkswagen in the Malaysian auto market.

Source:  Amazines.com