Foreign carmakers tried to buy Proton: Mahathir

Foreign carmakers tried to buy Proton: Mahathir

KUALA LUMPUR (AFP): Foreign auto makers have sought to take a 100 percent stake in Malaysia's national carmaker Perusahaan Otomobil Nasional Bhd. (Proton) as part of plans to dominate the world market, Prime Minister Mahathir Mohamad said Tuesday.

Mahathir told parliament the large foreign firms, which he did not identify, claimed they would be able to make cars more cheaply and benefit buyers.

But their actual aim, he said, was to have only five automotive firms controlling the global market.

"We are concerned that if they were to acquire Proton, they would turn our factories into mere assembly plants for their cars and not for Proton or national cars, like they had destroyed other auto companies which competed with them in efforts to control the global market," he said.

"We will not allow Proton to be taken over by anybody and be forced to buy (foreign) cars assembled by us," Mahathir was quoted by the official Bernama news agency as saying.

Proton, a pet project of Mahathir's, was set up in 1983 in collaboration with Japan's Mitsubishi Motors Corp. to spearhead an industrialization program.

More than 65 percent of cars sold in the country are Protons due to high tariffs on imported cars.

National oil firm Petronas is finalizing the purchase of a controlling 27.2 percent stake in Proton from HICOM Holdings Bhd.

Auto analysts say Proton will eventually need a foreign partner to survive in a fiercely competitive globalized market.

On May 1 trade ministers of the Association of Southeast Asian Nations agreed to grant Malaysia a two-year extension of a deadline for tariff cuts on cars. These were originally due to be cut in 2003 under the ASEAN Free Trade Area.

Mahathir said ASEAN countries granted Malaysia's request since they now realized the dangers of "a borderless world."

He repeated his frequent warning that unfettered globalization will expose Malaysia to a new form of colonialism at the hands of mighty multinationals.

Mahathir said globalization as defined by the developed countries meant limitless trading with no regulation.

"What is solely important for them is the profit, without considering the effects on the people and their country."