Report: GM restarts talks with Proton Holdings to form JV image

General Motors has reportedly begun talks with Malaysia’s largest carmaker, Proton Holdings, to set up a joint venture in the Southeast Asian country.

Bloomberg quotes two confidential sources familiar with the matter who say that current discussions revive negotiations that were abandoned in 2007. The talks are preliminary and may not lead to an agreement, the sources added.

An agreement would give GM the chance to expand car manufacturing in Southeast Asia beyond Thailand, deeply affected by the worst floods in the last 70 years. For Proton, the deal would provide access to GM technology that could make its products more competitive. Proton had unsuccessful alliance talks in the past with Volkswagen and Peugeot.

According to Bloomberg sources, GM isn’t interested in buying the controlling 43 percent stake in Proton held by Malaysian sovereign wealth fund Khazanah Nasional Bhd. “What Proton has to offer is immediate availability of production capacity. GM has all its Southeast Asia interests in Thailand right now and could be looking to spread risk and expand into other markets,” Alexander Chia, an analyst at RHB Capital Bhd. in Kuala Lumpur, was quoted as saying by Bloomberg.

GM spokesman Klaus-Peter Martin declined to comment on the matter, while Proton’s head of communications Izad Raya said the company doesn’t comment on speculation.