Proton sells motorcycle unit
Singapore: Malaysian carmaker Proton has abandoned its plan to expand into the motorcycle business and has sold Italy's MV Augusta Motor. The company has sold its 57.57 per cent stake in the European business to Italy's GEVI Spa for a symbolic Euro 1 and that the buyer would assume the Euro 107 million in debt.

This comes as state company Proton is struggling to cope with rising competition and a falling market share at home. It is also trying to seal a deal to sell a strategic equity stake to Volkswagen, the European carmaker.

MV Augusta, which is under bankruptcy protection, makes bikes under the Augusta, Cagiva and Husqvarna brands.

Proton spent Euro 70 million to buy Augusta last December. But Augusta went on losing money, contributing to Proton's losses.

Last month, Proton reported a quarterly net loss of M$154.3 million, weighed down in part by provisions of M$160.7 million to pay off Augusta's debts. Proton has been under increasing pressure at home, with its share of domestic sales falling to 44 per cent from 75 per cent over the past decade.
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