(AFP) National carmaker Proton said today it was in final talks with "parties concerned" on plans to manufacture parts and possibly assemble cars in China.

Perusahaan Otomobil Nasional Bhd (Proton) in a statement to the stock exchange said it expected to sign a deal Friday if the talks progressed smoothly.

"We are presently engaged in final negotiations with the parties concerned with a view to facilitate Proton's participation in the automotive industry in China," it said.

"The targeted signing date is this Friday, 11 January 2002, depending on the progress of negotiations."

Today's New Straits Times reported Proton chief executive Mahaleel Ariff was to go to China to seal a joint venture agreement on car parts and assembly with Gold Star Heavy Industry Manufacturing Co.

The joint-venture with Gold Star in Humen, China, aims to tap the potential of the world's most populated country and to prepare Proton for a freer regional auto market in 2005, the paper said.

At the moment, Proton sells more than six in every 10 new cars in Malaysia but its share will shrink when high tariffs on imported cars is cut to no more than five percent from 2005 under the Asean Free Trade Area.

Under AFTA, the tariffs were meant to be reduced from 2003 but Malaysia received a two-year reprieve.