Volkswagen has expressed interest in taking an equity stake in Malaysia’s biggest car maker, Proton Holdings Bhd, state-controlled Proton reportedly said on Wednesday.

Reuters reported that Volkswagen and Proton are hammering out a joint venture to make cars for Southeast Asia’s free-trade zone from Proton’s new, state-of-the-art production line, which has an annual design capacity of one million cars.

The news agency noted that the partnership has triggered speculation that Volkswagen wants to seal the arrangement with an equity investment in Proton, now 62%-owned by Malaysian state investment agencies, and exert some management control.

“The proposals go back and forth. They have expressed interest to take up equity,” Proton chairman Azlan Hashim told the annual meeting in Shah Alam, home to Proton’s older production line, according to Reuters.

“We’re open to equity. But it will all depend at the end of the day on the structure. This is the key,” he told Reuters.

“We continue to hold talks with Proton on the form of our strategic partnership agreed upon at the end of last year,” a spokesman for VW in Germany told the news agency, adding that various options were being examined.

The report also quoted Azlan as saying Volkswagen’s intention is very extensive and the partnership would cover everything from development to manufacturing.