Proton & Volkswagen talk resumed to set up a CKD plant in Malaysia

Previously, Volkswagen AG had shown interest in Proton’s manufacturing infrastructure in Malaysia with intention to establish a CKD hub catering to the Asian market. Unfortunately, there are many things occurred and turn things down during discussion between the tie-ups.

Now, Skoda, Volkswagen or even the luxury Audi at an affordable price range is possible again for Malaysian fellows as Proton & Volkswagen talk resumed. This time it will not be a conditional takeover or tie-up talk but a discussion about to set up a completely knocked down (CKD) plant locally.

Last week, Proton CEO Datuk Syed Zainal Abidin Syed Mohamed Tahir confirmed that the company is in discussion with the German automaker. OSK Research added, “The feasibility of this potential tie-up is expected to be announced by the end of the first half of this year. If it materialises by 2011, the said plant will manufacture Volkswagen sedan vehicles catering to the domestic and export market, predominantly in the Asean region.

It added that if Volkswagen does set up its hub here, the initial investment would be less than US$200 million (RM667 million). Last year, the VW’s partnership deal with IndoMobil to set up a CKD assembly plant in East Jakarta, Indonesia, to manufacture its MPV line-up at an initial investment of US$140 million (RM467 million).

I would see if the proposed CKD plant in Malaysia goes thru, we will see the local facility catering to the production of the Sedan segment using the Proton’s Shah Alam plant.