Detroit Electric eyes comeback with Malaysia's Proton as partner

The Netherlands-based firm Detroit Electric said Tuesday it has begun talks with Malaysia's state-owned carmaker Proton to produce electric cars for the Southeast Asian market.

"We are in preliminary talks with Proton. It started last month. We hope to conclude the talks by year-end," Albert Lam, chairman and chief executive officer of Detroit Electric, told AFP.

Proton has said it is keen to develop electric cars, to reduce carbon emissions and avoid rising fuel costs.

Lam also said Detroit Electric was keen to establish a plant in Malaysia to manufacture batteries for the electric cars, along with a research and development unit, at a total cost of about 30 million dollars.

Detroit Electric was an icon of the United States auto industry in the early 1900s, producing the first electric cars. But it went bankrupt in 1939 and was revived by Lam and other shareholders in the Netherlands and the US last year.

Lam said Detroit Electric hoped to collaborate with Proton to sell electric cars for the Southeast Asian market or to use Proton's existing manufacturing platform to produce electric cars under the Detroit Electric brand.

He said the company planned to roll out 30,000 electric cars by 2010, as he demonstrated their performance at a Proton test circuit in Shah Alam, west of the capital Kuala Lumpur.

Detroit Electric fitted the battery into Proton's Savvy and Pesona models and in a Lotus Elise sports car.

Proton said Tuesday it was "evaluating and studying the technology" but it was "too early to comment on the progress."

Proton was formed 25 years ago by former premier Mahathir Mohamad as part of an ambitious national industrialisation plan, but its market share has slumped in recent years as it faced difficulties coping in a new deregulated market.

The government has urged it to forge a partnership with a foreign automaker to give it the expertise and economies of scale that it needs to survive, but talks with Volkswagen and General Motors have collapsed.

Agence France-Presse - 9/2/2008 9:02 AM GMT