Malcolm Flynn | Jul 23, 2012

Proton owner DRB-HICOM could be the key to Volkswagen’s long-standing desire to partner with the Malaysian carmaker, according to a new report.

Reuters has reported new discussions between Proton’s current owners and Europe’s largest carmaker, after several failed attempts in the past.

Volkswagen’s most recent takeover attempt, in 2010, was quashed by the Malaysian Prime Minister who decreed that the then state-owned Proton should remain in Malaysian hands.

DRB-HICOM - itself a Malaysian corporation - acquired a 42.7 percent controlling interest in January.

It is unclear whether Volkswagen is looking to take a minority holding or a controlling stake in Proton, with the potential of a full buyout in the long term.

Such an alliance would help Volkswagen boost its presence in southeast Asia.

“Southeast Asia plays a considerable role in VW's global expansion plan; they can't afford not to be there", IHS Automotive analyst Christoph Stuermer said recently.

Volkswagen aims to be the world’s number one carmaker by 2018, lifting sales from its 2011 figure of 8.3 million vehicles, to a target of 10 million.

DRB-HICOM has an existing partnership with Volkswagen, producing the Passat for Volkswagen in Malaysia, with plans to add Polo and Jetta models in the near future.

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