Mitsubishi Motors to form new tie-up with Malaysia

[Variance]

Mitsubishi Motors to form new tie-up with Malaysia's Proton

Thu Feb 2, 12:31 AM ET

TOKYO (AFP) - Struggling Japanese automaker Mitsubishi Motors will form a new tie-up with Proton that would help the embattled Malaysian carmaker develop new models, a newspaper reports.

The tie-up will include a technology transfer, mutual supply of auto parts, including engines, and allow Proton to create new models, the Asahi Shimbun reported, quoting unnamed company sources.

The tie-up could also pave the way for production of Mitsubishi vehicles in Proton plants, the daily said.

Mitsubishi Motors president Osamu Masuko will visit Malaysia Friday to sign a statement of mutual agreement with Proton, it said.

A Mitsubishi Motors spokesman declined comment on the report but said a press conference would be announced later.

Proton has been desperate to woo a foreign partner to ensure its survival. Its share price plunged last month after Volkswagen quashed speculation it would seek a controlling stake.

Mitsubishi, Japan's only loss-making major automaker, sold its seven percent stake in Proton in March 2004 as part of its efforts to come out of the red but still provides some production parts and components to the Malaysian company.

The Japanese firm last month denied a report that emerged in Malaysia that the two companies would set up a new plant as a joint venture.

Mitsubishi Motors has been struggling to return to profit following years of slumping sales caused by a series of defect cover-up scandals.

Link: http://news.yahoo.com/s/afp/20060202/bs_af...wN5bnN1YmNhdA--