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Malaysia's EON agrees on new Proton deal

KUALA LUMPUR, March 2 (Reuters) - Malaysia's largest car distributor Edaran Otomobil Nasional Bhd (EON) said it signed on Tuesday a new deal to sell Proton cars, ending months of negotiations.

Under the deal, EON relinquishes its distributorship rights but instead becomes a "super dealer" of Proton Edar, the distribution arm of Malaysia's leading car maker.

EON will be allocated not less than 100,000 cars a year, subject to Proton's production plan and schedule.

EON will maintain existing margins on all Proton models it currently sells.

Margins for all new models and additional variants not currently sold by EON will be determined later but as a super dealer, it will enjoy a preferential margin from other dealers.

The six-year dealership is backdated from April 1, 2003 and Proton has the right to appoint other super dealers.

The accord also allows EON to sell non-Proton brands under separate entities and on separate premises.

EON had been a Proton distributor since the cars hit the Malaysian roads in the mid-1980s.

But the distributorship came under review after EON balked at Proton's proposal to require EON to chip in 30 percent to the cost of developing a new model.

Proton shares closed unchanged at 9.90 ringgit ($2.60) while EON closed up 2.7 percent at 9.55 ringgit. ($1=3.8 ringgit)