VW, Proton to make cheap car: Report

VW, Proton to make cheap car: Report

MUNICH: German automotive concern Volkswagen is planning to produce a small cheap car for the Southeast Asian market together with the Proton company in Malaysia, the weekly magazine Focus reported, citing VW chief executive Bernd Pischetsrieder.

In its latest issue, the magazine cited Pischetsrieder as saying the plans are to develop a car that would cost just 2,300 euros (US$3,013) to manufacture.

He said two teams of VW and Proton engineers in Malaysia are now involved in preparing the project, with the car to be produced at Proton's factory.

VW is also planning to produce a version of the compact Fox car as well as a Proton car technically adapted from VW's medium- sized Variant, Pischetsrieder told the magazine.

Until now, Southeast Asia has been a region in which VW has barely made a dent, with Japanese car makers dominating the market.

The VW boss has also dismissed rumors about a possible new VW plant in India, "I know nothing about this," he said.

The Focus report comes a few days after the daily Frankfurter Allgemeine Zeitung reported that VW was poised for a possible buy-in at Proton in the wake of the pullout by Mitsubishi Corp. from the Malaysian carmaker.

VW and Proton Holdings Bhd. agreed in October 2004 to cooperate more closely. -- DPA