Volkswagen has taken the big decision to expand its production premises to Malaysia. In connection with that, the company has sent a group of senior executives over to take a look at Proton Holdings Bhd’s operations and find out whether a future partnership is viable or not.

Volkswagen decided to go ahead with the decision after DRB-Hicom Bhd., the company’s partner, had made an agreement to take over 43% of the Malaysian company. That meant gaining the overall control over two Malaysian car plants which had the capability to produce 350,000 cars per year.

Once the deal goes through Volkswagen will use the Malaysian plants to build VW models mainly intended for the Southeast Asian markets. This would in turn help the German automaker gain a significant hold over the markets in Southeast Asia, where the company is yet to make its presence felt.

This is not the first time, however, that Volkswagen has attempted to collaborate with Proton. In November 2007, an agreement signed between the two companies ended up being a failure after 12 months of negotiations. And then, a similar problem arose in June 2010 as well when Volkswagen called off the operation. This time around, taking cues from the current scenario, the deal turning out to be successful is highly likely.

via inautonews