Shares in Malaysia’s state-controlled carmaker Proton Holdings fell nearly 7 percent on Friday after a Singapore newspaper said Germany’s Volkswagen AG had scrapped plans for a tie-up.

Malaysia had set an end-March deadline to find a strategic partner for Proton to give it greater access to foreign markets and had said it was talking only to Volkswagen, the world’s fourth-largest carmaker, about a strategic alliance. Singapore’s Straits Times newspaper, quoting an unnamed Malaysian government official, said Volkswagen had told state investment firm Khazanah Nasional Bhd, a key shareholder in Proton, that setting up a production platform in Southeast Asia was not a key priority at this time.