Proton and Malaysia have too little to offer Volkswagen, according to a new study, which finds that there are many other countries that are much more attractive investment locations for the company.
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This is the conclusion of a new study by management consultants AT Kearney, and reported by German press this week.
“[Malaysia] is not high up on the list of countries for international firms to invest in,” Frank Rattey, one of the report’s authors, told Handelsblatt newspaper. “Costs are higher than in China, and the size of the market is limited.”
Rattey added that the growth in emerging markets is in ultra low cost cars under $US3,000. It would be too expensive to produce these in Malaysia.
Proton has been negotiating with Volkswagen for many years about a possible cooperation and recently announced that talks had entered a heightened stage, that would see Volkswagen executives meet with members of the Malaysian government. Proton said that Volkswagen wants to increase its presence in south east Asia.
Other press reports have said that Volkswagen is seeking a 20% share in Proton, that can be increased to more than 50% in the medium term. At present the Malaysian government is the main shareholder with a 59% stake.
General Motors is also in talks with Proton.
