No Marriage for Proton and Volkswagen

Sad news indeed

As reported in The Star, Volkswagen has decided to scrap its plans of forming a joint-venture with Proton. In the words of its Chief Executive Bernd Pischetsrieder,

“We had a very specific idea how we wanted to proceed there. Unfortunately the Malaysian government, Khazanah and Proton had different ideas. Therefore, what we wanted in the cooperation with Proton will not materialise"

So there you have it. Proton's best chance of pulling itself out of the rut it's gotten itself into over the past 20 years has now evaporated. It doesn't take much to imagine what sort of conditions the Malaysian government, Khazanah and Proton had in mind with regards to the proposed JV. Their stifling requirements probably entailed the continued support of our country's legion of sub-par vendors, the insistence that bumis hold certain 'key' positions in the new entity and who knows what else.

I heard that Proton's shares fell as much as 20 percent to RM5.10 on this news. Investor confidence is glaringly absent, and for good reason.

I had high hopes for this joint venture. I guess it was all just wishful thinking on my part.