PSA has ended talks with Proton over possible joint ventures.

In September 2006 the two companies started talks on a possible cooperative venture to support the development of Peugeot and Citroën in Malaysia which would also be a production base for the marques' operations in the ASEAN region.

An in-depth study of the automobile market and the economic conditions for co-producing vehicles with Proton concluded that conditions for the project's success were not present, PSA said in a statement.

Separately Malaysian business weekly Edge reported that talks between Proton and Volkswagen were not proceeding well. Volkswagen and Proton have reportedly met several times but have not yet been able to formalise a basic agreement.

Proton has also been in negotiations with a third potential partner, GM. The Malaysian government, which owns 59% of Proton, has said it would announce a strategic partner this month. "If this schedule is adhered to strictly, sources say General Motors, the world's largest automaker, could well become the partner of choice for Proton," the Edge said.

AFP noted that the government is under intense pressure to announce details of a partnership for loss-making Proton, which last year lost its status as Malaysia's biggest-selling carmaker to rival Perodua.