Volkswagen may acquire Proton, Lotus

July 26, 2012 12:00 AM

German automaker Volkswagen has made it clear it hopes to be the largest automaker in the world, and that means having a foothold in nearly every region where cars are sold. With strong presences in the U.S. and Europe, the next market Volkswagen is hoping to expand into is Asia. To do so, the company may be thinking about acquiring Malaysian automaker Proton, best known as the parent company of Lotus.

According to Reuters, the German manufacturer has had its eye on Proton for some time. Volkswagen currently has one factory in Malaysia, where it builds its successful Passat sedan. The company may eventually begin to build the Jetta there as well. However, it would be more cost-effective to use factories already in place rather than build new ones, and this is where the Proton-Volkswagen relationship would make sense.

As of now, Toyota is the dominant brand in Southeast Asia, so Proton may be Volkswagen's best way into the region. The automaker previously considered buying Proton in 2007, but the deal fell through. Now, Reuters says Volkswagen may buy a controlling stake in the brand, or could simply seek to become partners with a minority interest.

It's unknown just how much the deal would be worth, but the Malaysia government sold a 42 percent share in the company for $411 million earlier this year, meaning Proton may be valued at close to $1 billion.

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