Malaysia Says Proton Needs a Foreign Partner

The Malaysian government says it won’t approve financial aid to Proton Holdings Bhd until the ailing carmaker finds a strategic foreign partner.

Malaysia’s Ministry of International Trade and Industry says a loan to Proton also will hinge upon unspecified “tough but necessary measures” to ensure the company's sustainability. The government has invested 13.9 billion ringgit ($3.5 billion) in Proton since the company was launched as a state-controlled business in 1983, according to The Nikkei.

Proton controlled 70% of Malaysia’s car market in 1993. But it has seen its share shrink to 15% today because of quality issues, increasing foreign competition and a lack of success in foreign markets.

The company, which once had a strong alliance with Mitsubishi Motors, has since explored production and/or tech sharing partnerships with General Motors, Hindustan Motors, PSA, Nissan, Suzuki and VW. Talks about equity partnerships inevitably collapsed, mainly over issues of company control.