Representatives of the two companies signed a memorandum of understanding this week. The partnership involves the assembly of Volkswagen vehicles in Malaysia, with operations scheduled to begin around a year from now.
Chairman of the board of management of Volkswagen AG, Dr Bernd Pischetsrieder, says: "The Volkswagen Group intends to gain a significant market share in the countries of the ASEAN region over the coming years. The two companies will bring their respective strengths and benefits to this partnership in an optimum way."
The partnership stipulates that both parties will retain their full corporate independence.
The collaboration will enable Volkswagen to establish a base for servicing the markets of the ASEAN region, without having to make extensive capital investments. The primary aim is to build up an automobile industry of global market standard in Malaysia, exporting to other countries in the region as well as supplying the local market. Opportunities for joint vehicle development will also be closely considered.
The goal is to launch the first models assembled in Malaysia into the local market by the end of next year. The initial sales target for 2006 is to top 15,000 units, with that figure being increased substantially over the subsequent years. A key factor in the strong growth prospects is that Proton already operates an efficient dealership network that can be utilised at least in part for sales of Volkswagen vehicles.
At the same time the aim is also to build up the components industry in Malaysia, enabling some of the parts required to be procured from local manufacturing sources.
Total sales reached 1,999 to the end of September 2004, compared to 1,812 in the same period of 2003, an increase of 10%.