Japan’s biggest trading house, Mitsubishi Corporation, on Tuesday said it was not looking to sell its stake in Malaysian car maker Proton, despite the firm’s move towards links with Volkswagen AG.

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“We still have some business links with the company and we are not thinking about selling the stake anytime soon,” a Mitsubishi spokesman told Reuters.


Mitsubishi Corp, a founding member of the Proton project to develop a Malaysian car-making industry, still owns 7.93% of the state-controlled carmaker while the Malaysian government owns 45%, the report said.


The news agency noted that speculation about the future of Mitsubishi’s stake resurfaced late last month when Proton, Malaysia’s biggest car maker with around half of the local market, struck a deal to assemble Volkswagen cars in Malaysia for sale in Southeast Asia.


Volkswagen did not take an equity stake in Proton under the deal, but industry analysts have told Reuters this may follow. Under the deal, the first Malaysian-assembled VW models will be launched by the end of 2005, generating sales of over 15,000 units in 2006.

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Reuters said Mitsubishi Corp. has been a key partner to Proton since its inception in 1983, supplying engines and car designs along with Mitsubishi Motors Corp., which recently sold its separate 7.93% and is struggling to rebuild itself after a slide in sales [largely due to a lengthy recall scandal] plunged it into the red.


A Proton spokeswoman told the news agency Mitsubishi Corp. still supplied a small number of parts for manufacturing Proton vehicles.