Proton to announce Volkswagen tie-up talks results in 1 to 2 weeks, posts profit for FY2009/10

When Proton first announced that it was not proceeding with a supposedly finalized tie-up with Volkswagen quite some time ago, to be honest I had abandoned hope in such a tie-up happening.

But that feeling stayed only for a moment as over the past few Proton events between then and now, the responses from Proton management especially Datuk Syed Zainal when answering questions from the media regarding the revival of such a tie-up seemed to say no comment officially but somehow you just had the feeling that Proton was up to something exciting when you looked at the good Datuk’s facial expression.

And then last night at its AGM where it announced its latest financial numbers, the chairman confirmed it – Proton and Volkswagen is indeed in talks and an outcome of what is being discussed would be announced in two weeks time. He declined to mention any specifics for now, saying he prefers not to jump the gun, so we don’t know if its something like a contract assembly agreement or perhaps something larger involving an equity tie-up or a technical collaboration.

We suspected that something was going on – while going in and out of the Proton COE HQ in Shah Alam to pick up cars for our Driven shoot in the past few months, we’ve seen visiting Touaregs parked near the higher management parking a few times and had a feeling it was perhaps Volkswagen officials over for a visit.

Proton CEO Datuk Syed Zainal Abidin also revealed that Proton is expected to launch a new model around October or November 2010. This is quite interesting actually as Datuk Syed Zainal said the new model will contribute significantly to Proton’s ability to further increase market share both at home and in export markets. If it is in fact a rebadged Mitsubishi, this means we also have export rights for the car.

At its AGM earlier this week, Proton posted a consolidated profit before tax of RM285 million for the financial year ending 31st March 2010, an improvement of over 150% compared to the last financial year’s RM319 million loss. It reported an increase in domestic sales volume of 8%, despite a 2% vehicle sales volume (TIV) contraction. Cumulative revenue was RM8.23 million – a 27% increase over the RM6.49 billion posted in the previous financial year. Proton attributes this improvement to encouraging sales of the Saga, Persona and the Exora, which are Proton’s three core models