Mitsubishi sells stake in Proton
Mitsubishi sells stake in Proton
Associated Press, Kuala Lumpur,Malaysia
Japan's Mitsubishi Corp. said on Wednesday it has sold its
entire 7.93 percent stake in Malaysian state carmaker Proton
Holdings Bhd. to the government for 384 million ringgit (US$101
million).
The move marks the end of a legacy of cooperation between
Proton and Mitsubishi that has lasted since Proton's inception in
1983, when it began making cars with the Japanese auto giant's
technology and car parts.
However, in recent years analysts have expressed concerns
about the Mitsubishi tie-up because it seemed to have failed to
provide Proton with the cutting-edge technology needed in new
generation cars.
The sale of the nearly 43.6 million Proton shares to Khazanah
Nasional Bhd., the finance ministry's investment arm, was
confirmed by Mitsubishi spokesman Hidenori Myoshin in Tokyo to
Dow Jones Newswires. "There is no reason to keep the stake," he
said without elaborating.
The sale sets the stage for the equity entry of Proton's new
partner, Volkswagen AG of Germany.
Currently, Volkswagen has no holdings in Proton, though the
two have agreed to assemble Volkswagen models at a Proton plant
that will be sold in Malaysia and eventually in neighboring
countries.
"This paves the way for a proper strategic alliance, (since)
one without equity isn't a proper alliance," said Edward Ong,
senior investment analyst at Macquarie (Malaysia) Sdn. Bhd.
Most analysts believe an equity partnership between Volkswagen
and Proton is necessary for the transfer of real benefits to
Proton, such as technology development.
Proton is Southeast Asia's biggest carmaker and Malaysia is
the region's largest passenger car market, with over 400,000 new
cars sold each year. Most of them are Proton because they are far
cheaper than foreign-owned cars - either imported or those
assembled here.
The government imposes high tariff on foreign cars to protect
Proton, but the duties are being whittled down gradually as
mandated by a Southeast Asian free trade area of which Malaysia
is a member.
Proton's share in the Malaysian market has slipped to around
45 percent compared to about 65 percent a few years ago.