GM not ruling out interest in Proton

KUALA LUMPUR (Reuters) -- General Motors has not ruled out interest in a possible alliance with Malaysian car-maker Proton, a senior GM official said today, despite the Malaysian firm's intention to go it alone.

GM and Europe's Volkswagen had both recently expressed interest in an equity partnership with state-controlled Proton, with Volkswagen seen as the frontrunner to clinch a deal.

But the government shocked investors last week, ending talks and saying loss-making Proton should have a chance to turn around its business on its own, without help from a global marque.

"Never say never. But in the meantime, things have moved on," Steve Carlisle, head of GM's Southeast Asian operations, told reporters at the launch of a new Chevrolet vehicle in Malaysia.

"Probably by the time we talk again, things will have moved on some more.

"We will need then to understand what the ... conditions are, what might be possible and what the situation really is. Then we will make a fresh assessment at that point in time."

Proton's shares have lost a quarter of their value, or about 703 million ringgit ($209.6 million), since the government's November 20 announcement that Proton would try to restore its fortunes alone.

Proton's domestic market share has more than halved to around 30 percent from around two-thirds of the market in the 1990s.

GM produces about 9 million cars a year and Volkswagen 5.7 million, while Proton makes just over 100,000, of which only 21,000 are exported. Proton has formed alliances with Chinese and Japanese carmakers but these are not equity tie-ups.

Despite the government's decision, there is now speculation that it will look to a local partner to bolster Proton, such as rivals DRB-Hicom and unlisted Naza, which both assemble and sell foreign marques in Malaysia.

"If there is an opportunity, and if the government allows us to have an opportunity, of course we would love to see where we can participate," said DRB Chairman Mohd Khamil Jamil.

"We would be very happy to look at it and it must be a win-win situation," he told reporters.