VW to buy Proton?
VW is said to be considering yet another bid for marginal car brand, Proton, according to industry website just-auto.com.
Proton was set up basically as a vanity project by Malaysian Prime Minister Mahathir to demonstrate that Malaysia was a modern country. It did well at first by assembling Mitsubishi Lancers, but suffered from delusions of competence, and did more of its own engineering over the years, with the result that quality fell through the floor. UK market share has fallen from 1% in 1992 to 0.02% last year.
So why would VW want it? Well, VW wants to be selling more than 10 million cars a year by 2018 and most of its factories are running close to capacity. Proton factories would give it more production capacity for Asia. It certainly does not want the cars, except possibly for comedy value.
Proton is now privately owned by a Malaysian conglomerate, so VW probably hopes it can have a rational conversation with the new owners. When Proton was state-controlled, Mahathir would never allow his baby to be sold, despite interest from the company that made such a spectacular success of turning around Skoda.
One interesting question is where a sale would leave Lotus, a Proton subsidiary and itself not exactly a stranger to red ink. Would VW want yet another sports car brand alongside Porsche, Lamborghini and Bugatti? It's hard to see what the value of Lotus would be to the Germans.