Proton has confirmed that alliance talks with Germany’s Volkswagen Group have been called off.

Malaysia’s first national carmaker said in a brief statement on Monday that Volkswagen said it “has other priorities” at present and that further negotiations would not take place.

The two companies had held talks continually for a few years, initially focused on a strategic partnership involving a capital tie-up. Over the last year, the focus shifted to just capacity and model sharing in Malaysia.

Proton said it would continue to pursue its “multi-local OEM” strategy in Asia, including local assembly in key emerging developing markets, as well as its technology partnership with Mitsubishi Motors.

Proton said it will continue its partnership in China with Youngman Auto Co Ltd as well as its aggressive expansion in the Asean region. The company is expected to give a progress update on talks with India’s Hero group.

Tony Pugliese