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Phoenix signs letter of intent with Proton

After rumours of an imminent alliance between MG Rover and an unspecified Asian manufacturer, MG Rover's mystery partner-designate is revealed - subject to the outcome of exploratory talks about collaboration between Phoenix Venture Holdings and Malaysia's Proton. Phoenix Venture Holdings ("PVH") announces today, 18 February, that it has signed a letter of intent with Proton in relation to PVH and its subsidiaries, including MG Rover Group, working with Proton to explore the feasibility of a number of potential collaborative projects. The two firms will now engage in further discussions, and as and when any definitive agreement is reached a further announcement will be made. For the moment,it is not clear whether collaboration may centre on manufacturing or distribution arrangements; at all events, Proton is unlikely to be able to provide the basis for MG Rover's most urgent model replacement, that for the present 45 series. Both firms have been said to need allies, but in the UK, Proton subsidiary Lotus' engineering arm might be more a more useful partner for the MG brand than its Lotus Cars business.

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