Malaysian national carmaker Proton will consider a strategic alliance with local auto firms after partnership talks with Germany's Volkswagen were shelved a week ago, state media reported.

"Whatever is good for Proton, it will definitely be on the cards," chairman Mohammed Azlan Hashim was quoted saying by the official Bernama news agency late Wednesday.

"(An alliance with a local partner) has to be considered ... we have to keep an open mind," he said in Bangkok where he was attending a motor expo.

Local car companies including DRB-HICOM, the Naza Group and conglomerate Sime Darby have expressed interest in striking an alliance with Proton.

Malaysia's state investment arm Khazanah Nasional, which controls Proton, announced on November 20 it had ended long-running talks with Volkswagen due to improving sales of Proton cars.

Proton shares plunged 18.6 percent to a near 10-year low of 4.02 ringgit (1.20 dollars) the day after.

The government had been keen to secure a foreign strategic partner to revitalise Proton, which experts say has suffered from stiff competition, a lack of new models and a reputation for poor quality.

The ailing company, which posted a 46.75 million ringgit (13.9 million dollars) net loss for its three months to June, has seen a sharp decline in market share in recent years.

Bernama on Monday quoted Deputy Prime Minister Najib Razak as saying the government has not ruled out the possibility of local partners.

"We'll have to decide later," he said, adding that the government wanted to talk to Proton management about the issue.