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