Malaysian automaker Proton confirmed today that it has been in talks with Germany’s Volkswagen about a possible tie-up between the two brands that could result in shared products.

“We will make an announcement in one to two weeks,” Proton Chairman Mohamad Nadzmi Mohamad Salleh told reporters in Kuala Lumpur.

Volkswagen and Proton first talked about an alliance in 2007, but those discussions dissolved over various disagreements. The latest reports indicate that the German automaker wouldn’t seek a stake in Proton, but rather would be interested in rebadging its upcoming Passat replacement as a Proton vehicle. Other platform-sharing and rebadging could also be on the table, sources close to the discussions said.

Proton, a relatively small automaker, is best known in North America for its ownership of British sports car manufacturer Lotus. The automaker posted a profit for the first quarter of 2010, although it has watched its market share dwindle in Southeast Asia.

Click the title for the source