KUALA LUMPUR: PROTON HOLDINGS BHD [] share price fell in early trade Monday, June 7 after proposed tie-up between the national carmaker and Volkswagen AG (VW) collapsed as the latter had "other priorities".
Proton over the weekend confirmed that it had been informed by VW that as such, a potential collaboration with the Malaysian carmaker could not be pursued.
At 9.10am, Proton's share price dropped 13 sen to RM4.60.
"Proton acknowledges the decision made by Volkswagen. As one of the largest OEM (original equipment manufacturer), Volkswagen would (have been) an interesting collaboration partner for Proton," Proton said.
There had been speculation since late last month that talks between the two carmakers had collapsed.
The Edge weekly in its latest edition reported the speculation was that both parties could not reach an agreement as VW intended to assemble its low-priced models at Proton's plants, and that would most likely cannibalise the latter's sales.
The confirmation on Sunday also came amid heightened speculation over the state of affairs at Proton's board that had seen the resignation of two independent directors, which according to The Edge may be over differences of opinions on the right direction for the company.
In 2007, it was Proton that had rejected VW's overtures for a strategic tie-up. The then Proton management had reportedly convinced the government that it was on a turn-around and could garner a better deal with a stronger balance sheet.
Meanwhile, OSK Research maintained its buy call on the stock and said the near-term outlook over the next two years will continue to be in Proton's favour given the significant improvement in its operating landscape, which has yielded positive results on its network rationalisation and the continuity of its model pipeline (one car a year).
However, the research house cut its target price for Proton to RM5.67 (from RM6.94) as it trimmed its PE from 11 times to nine times on FY11 earnings given this negative development and the lack of positive news development over the near term.
Proton over the weekend confirmed that it had been informed by VW that as such, a potential collaboration with the Malaysian carmaker could not be pursued.
At 9.10am, Proton's share price dropped 13 sen to RM4.60.
"Proton acknowledges the decision made by Volkswagen. As one of the largest OEM (original equipment manufacturer), Volkswagen would (have been) an interesting collaboration partner for Proton," Proton said.
There had been speculation since late last month that talks between the two carmakers had collapsed.
The Edge weekly in its latest edition reported the speculation was that both parties could not reach an agreement as VW intended to assemble its low-priced models at Proton's plants, and that would most likely cannibalise the latter's sales.
The confirmation on Sunday also came amid heightened speculation over the state of affairs at Proton's board that had seen the resignation of two independent directors, which according to The Edge may be over differences of opinions on the right direction for the company.
In 2007, it was Proton that had rejected VW's overtures for a strategic tie-up. The then Proton management had reportedly convinced the government that it was on a turn-around and could garner a better deal with a stronger balance sheet.
Meanwhile, OSK Research maintained its buy call on the stock and said the near-term outlook over the next two years will continue to be in Proton's favour given the significant improvement in its operating landscape, which has yielded positive results on its network rationalisation and the continuity of its model pipeline (one car a year).
However, the research house cut its target price for Proton to RM5.67 (from RM6.94) as it trimmed its PE from 11 times to nine times on FY11 earnings given this negative development and the lack of positive news development over the near term.
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