KUALA LUMPUR (AFP) - Malaysia loss-making automaker Proton Wednesday said collaboration talks with French car giant PSA Peugeot Citroen failed because both parties could not meet their expectations.

"From the series of discussions and meetings held in relation to the feasibility study between Proton and PSA, the findings did not meet the expectations of both Proton and PSA at this point of time.

"Therefore, Proton will not pursue this matter any further," Syed Zainal Abidin Syed Mohamed Tahir, managing director of Proton Holdings, said in a statement. Proton said it had received a letter from PSA and "confirms that both parties will discontinue all further negotiations in connection with the proposed collaboration."

Malaysia's government is currently in talks with a number of companies to provide Proton with the necessary know-how and give back to the company its status as Malaysia's biggest-selling carmaker.

The Malaysian government owns 59 percent of Proton, including a 43 percent stake held by its investment arm Khazanah Nasional.

Proton recently announced its third consecutive quarter of losses, blaming sluggish sales and increased competition.

The loss of 281.45 million ringgit (80.54 million dollars) in the third quarter to December compared with a net profit of 86.51 million ringgit a year earlier.

In addition to PSA Peugeot Citroen, Proton has been in talks with U.S. auto giant General Motors and Germany's Volkswagen AG. Three Malaysian automotive firms have also expressed interest in taking a stake in the company.