The government will not force two national car companies, Proton Holdings Bhd (Proton) and Perusahaan Otomobile Kedua Nasional Sdn Bhd (Perodua) to merge, says Minister of International Trade and Industry, Mustapa Mohamed.

He said any solution or proposal needs to be agreed to by both stakeholders.

parliament pc jeyakumar and mustapha 171208 04 "We cannot force them to make a decision as there is a long spectrum. At one end is loose cooperation and at the other, a merger, which has yet to be decided," the minister told reporters at a signing ceremony between SME Corporation Malaysia and SME Bank in Kuala Lumpur today.

He said the government would encourage and have talk with both companies.

Mustapa has been involved in individual discussions with the two companies.

"It's a major collaboration and cooperation between Proton and Perodua and not a straight forward process," he explained.

He also said, in reality, there have been a lot of mergers and it made sense for the two companies to collaborate and make the automotive industry competitive.

It was reported earlier that the government had signalled the need for a merger in the automotive industry, especially between Proton and Perodua.

- Bernama