New Delhi: A little over a decade after it first signalled its intention to enter the Indian market, Malaysian auto maker Proton Holdings Bhdis testing the waters again.

Malaysia’s national car company plans a contract manufacturing and distribution agreement with a local partner. “We want somebody who understands the Indian market,” said a person familiar with the situation, pointing out that the agreement would have a long-term nature.

Proton, yet to decide on the models it will launch, has held discussions with the Hero Group and Mahindraand Mahindra Ltd. The news was first reported by ‘Dow Jones Newswires’.

“We’ve just had initial discussions and it is too premature to say anything further,” said a spokesperson for the Hero Group.

“We do not comment on speculative stories,” said a Mahindra spokeswoman.

Questions sent to Proton last Friday remained unanswered.

Proton, which has been facing severe competition in its home market, first announced its intention to enter India in 1998 with a plan to set up a manufacturing facility.

Earlier this decade, it began exploring India again and is believed to have held talks with Mahindra and Mahindra, according to another person familiar with the situation. Mahindra explored the possibility of Proton making cars using the Scorpio platform, said another person familiar with the talks.

Talks with Hindustan Motors didn’t succeed as the Indian company quoted too high a price for manufacturing the cars, the person said. Hindustan Motors already has a contract manufacturing and distribution agreement with Japanese carmaker Mitsubishi Motor Corp.