MALAYSIA'S leader says national car maker Proton should tie up with a strong foreign partner in a joint venture to remain competitive.

Asked in an interview yesterday if a foreign partner can hold a majority 51 percent stake, Abdullah Badawi said: 'It doesn't matter as long as Proton, the mother company, is entirely ours.

'This [joint venture] is our investment in collaboration with another company. We will [find] what is the best arrangement which will be entirely commercial,' he said.

Pressured by dwindling sales and growing competition as Malaysia liberalizes its auto market, state-owned Proton began searching for a new foreign partner after Japan's Mitsubishi bailed out as a major shareholder in 2004 due to its own financial problems.

Alliance talks with Volkswagen and General Motors failed due to the government's reluctance to cede control of Proton.

Abdullah declined to comment on speculation that Proton had revived talks with Volkswagen, saying it was up to Proton to find the best suitor.

Some analysts say it will be tough for Proton to penetrate global markets without a strong foreign partner.