VW mulls renewed bid for Malaysia's Proton - sources

Thu Jul 19, 2012 10:25am EDT

* VW open to minority holding or controlling stake-sources

* VW spokesman declines to comment on speculation

By Andreas Cremer

BERLIN, July 19 (Reuters) - Volkswagen is considering launching a new bid for Malaysia's Proton as Europe's largest car maker aims to tap growing southeast Asian markets in its quest for global dominance, sources familiar with the matter said on Thursday.

VW, which failed in 2007 to form a tie-up with Proton, might seek either a minority holding in the owner of UK sports-car manufacturer Lotus or a controlling stake, two sources said on condition they not be identified.

Wolfsburg-based VW assembles the Passat sedan in partnership with Malaysian automotive and property conglomerate DRB-HICOM at the company's plant in Pekan. VW, which does not have a factory in Malaysia, also plans to produce the Jetta and Polo models at DRB-HICOM's factory.

"Toyota has declared the area as its own backyard," said Christoph Stuermer, a Frankfurt-based analyst at research firm IHS Automotive. "But southeast Asia plays a considerable role in VW's global expansion plan; they can't afford not to be there."

German publication Manager Magazin reported earlier on Thursday that VW was considering another bid for Proton, noting that its deliberations might even include a full-scale acquisition in the long term.

VW spokesman Eric Felber declined to comment on the report.

The German car maker, which surpassed Toyota last year to become the world's second-biggest manufacturer behind General Motors, has a goal of boosting global deliveries to more than 10 million vehicles by 2018.

Six-month sales, including the group's Audi and Skoda brands, rose 8.9 percent to 4.45 million vehicles, putting VW on track to beat last year's record 8.3 million. Deliveries in the Asia-Pacific region surged 17.6 percent to 1.48 million cars, of which 1.3 million were sold in China, VW's biggest market.

Previous talks with VW foundered partly because of pressure from Malaysia's former Prime Minister Mahathir Mohamad, who, as Proton adviser, said that the company (which was then state-owned) must remain in Malaysian hands. Malaysia's state investment arm Khazanah sold its 42.7 percent stake in Proton in January to DRB-HICOM for $411.9 million.

Underlining its push for world dominance, VW announced a major reshuffle of group and brand managers on June 2 to drive growth in emerging markets and accelerate a planned integration of its truck-making divisions.

"It's our clear goal to continue the successful (expansion)course of past years with great dynamics and stability," Chief Executive Martin Winterkorn said on June 2.

(Editing by David Goodman)