Malaysia's PM says Proton-VW talks off - report

KUALA LUMPUR, May 31 (Reuters) - Talks for Germany's Volkswagen (VOWG.DE) to buy a stake in Malaysian carmaker Proton Holdings Bhd (PROT.KL) fallen through and Proton will talk to other parties for a tie-up, Malaysia's prime minister said on Thursday.

The government had said early this year it was talking to several car makers, including Volkswagen and General Motors Corp. (GM.N), about a possible partnership with Proton but it missed an end-March deadline to announce a deal.

Loss-making Proton, which faces a shrinking market share in the increasingly competitive domestic market, is looking to tie up with a global car maker to boost its sales and turn the company around.

"I have decided, since Volkswagen is not interested in the proposal that Proton wants in terms of equity, Proton needs to talk to other people," Abdullah was quoted as saying by state-run Bernama news agency.

Abdullah said Proton had to improve its performance after the carmaker reported a fourth straight quarterly loss on Thursday as sales continued to slide.

"They have to turn around. They cannot be going on making losses," he said.

Asked whether Proton would need top management changes, Abdullah said: "They have to do whatever they think is necessary."

Proton's shares ended up 4.9 percent at 5.35 ringgit.