The government is making progress in its negotiations to secure a foreign partner for troubled national carmaker Proton, Second Finance Minister Nor Mohamed Yakcop said today.

Talks are ongoing with both Germany's Volkswagen AG and US automaker General Motors to provide a strategic tie-up for Proton who needs foreign technical expertise to stem a sharp decline in market share and cut losses.

"Things are moving. Discussions are taking place. We are making progress," Nor Mohamed told reporters.

He declined to provide details, including a deadline to conclude a deal, citing the sensitive nature of the talks.

"I cannot reveal that because it's very sensitive. Give us a bit of time ... I don't want to say anything on the deadline yet," the minister said.

State investment arm Khazanah Nasional is the controlling shareholder in Proton, with a 42.74 percent stake. State pension fund EPF and national oil firm Petronas own 12.07 percent and 8.84 percent respectively.

Khazanah's managing director Azman Mokhtar has given the end of this year as the "overall deadline" to clinch a deal.

Proton last year lost its status as Malaysia's biggest-selling automaker to homegrown rival Perodua and recently reported larger than expected net losses of RM591.36 million for the year to March 2007.