A management buyout of Malaysia's national carmaker Proton Holdings (PROT.KL) could be possible, the firm's chairman was quoted by the Star newspaper as saying.

Mohd Nadzmi Salleh said he was willing to help the management spin off the carmaker that analysts say has struggled to retain it's domestic market share and come up with new vehicle models.

If Proton is indeed for sale and the price is right, I see no reason why a management buyout should not be considered, he was quoted as saying in Star's business edition.

As Proton is a fairly well-managed company and financially strong, I believe turning Proton around would not be too difficult a task.

Proton officials were not immediately available for comment.

Proton shares have more than doubled so far this year, fuelled by market speculation Malaysian billionaire Syed Mokhtar Al Bukhary may be interested in acquiring a controlling stake in the company.

Local media reports also have also said Proton's former executive director Kisai Rahmat is interested in a controlling stake and may team up with another car distributor Naza Group for a takeover.

Prospects of a tie-up with a foreign strategic partner have also perked up investor interest in Proton. German car maker Volkswagen (VOWG.DE) said last month it was exploring the possibility of building cars in Malaysia with Proton. [ID:nLB704931]

Volkswagen was previously in talks with the Malaysian government, the controlling shareholder of Proton, to take up a stake in the carmaker, but talks collapsed in 2007 for undisclosed reasons.

Citing sources, the Edge Financial Daily reported on Friday that Proton had started discussions with India's Hero Group to build small passenger cars for the growing Indian market.

Talks are expected to be concluded by year-end and involve Proton supplying a platform for the small car and providing manufacturing expertise to Hero. (Reporting by Niluksi Koswanagell; Editing by Anshuman Daga)