Daihatsu is negotiating with Perodua to increase its shareholding beyond the present
25 percent, Agence France-Presse (AFP) reported.

Prime Minister Mahathir Mohamad confirmed to AFP that negotiations are ongoing
but no deal has yet been reached.

The New Straits Times quoted the prime minister as saying that the government
would only allow Daihatsu to take a majority stake in Malaysian production of
export market cars.

"There have been negotiations and nothing has been finalised. Of course
we want to retain that part of Perodua that is the manufacturing of cars for
the local market," Mohamed reportedly said.

"If they (Daihatsu) want to have a share or even a majority share in the
production of Perodua cars for the Asean (Association of Southeast Asian Nations)
or other export markets, we have no objection to that."

AFP said that Daihatsu Japan owns a 20 percent slice of Perodua – Malaysia’s
second largest national car maker – plus another five percent through its
local subsidiary Daihatsu (M) Sdn. Bhd. Japan’s Mitsui Co also owns seven
percent.

Local shareholders are Umw Corp. (38 percent), Med-Bumikar Mara (20 percent)
and PNB Equity Resource Corp. (10 percent).

The New Strait Times said that Daihatsu together with parent company Toyota
plans to make the Perodua plant in the central state of Selangor a regional
assembly centre for small cars in preparation for the ASEAN Free Trade Area
(AFTA).

Perodua produces a range of small, economical cars based on Daihatsu designs.
Rival Proton, whose models are based on Mitsubishi products, leads the Malaysian
market with a 65 percent share.

Import tariffs for most products will be reduced to a maximum of five percent
under AFTA by 2003. Malaysia has obtained a two-year reprieve for its auto industry
until 2005, AFP said.


To view related research reports, please follow the links
below:-

Global
Car Forecasts to 2005

The
automotive industries of Asia-Pacific