Malaysia’s prime minister Abdullah Ahmad Badawi has said troubled national car maker Proton and Volkswagen are in negotiations, but declined to give details, according to reports.


“I don’t want to comment because it is being negotiated,” Abdullah was quoted as saying in the New Straits Times, according to the Agence France Presse (AFP) news agency.


Reports last week said Volkswagen had agreed to buy a controlling stake in Proton’s manufacturing division – news which sent Proton shares up 13.14% on Friday.


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.


The VW deal is aimed at providing Proton with the expertise it needs to arrest a sharp decline in market share as competition intensifies.


Proton has been in talks with General Motors and PSA as well as Volkswagen, while three Malaysian automotive firms have also expressed interest in taking stakes in the company, Agence France Presse said.


The Malaysian government owns 59% of Proton, including a 43% stake held by its investment arm Khazanah Nasional and has said an announcement on a partnership deal will likely come in the first quarter of this year.


Proton’s market share has fallen sharply in recent years due to the whittling away of duties that has made imports more affordable and a persistent reputation for poor quality and unimaginative models, AFP added.