KL starts shipping Proton cars here

KL starts shipping Proton cars here

KUALA LUMPUR (DPA): Malaysia began shipping Proton cars to Indonesia yesterday under a complex trade deal that will see Kuala Lumpur buying Indonesian-made military aircraft in return.

Proton hopes that its contract with Jakarta-based Citra Lamtoro Gung company to export 1,000 Saga saloons is the beginning of a joint venture operation to assemble Protons in Indonesia.

Proton, set up by the Malaysian government with Japan's Mitsubishi ten years ago, has clinched deals that are expected to lead to assembly operations in the Philippines and Vietnam.

Like other countries in the region, Indonesia protects its motor industry by making the import of built-up cars prohibitively expensive.

The deal between Proton and Citra Lamtoro Gung will enable Proton to circumvent Indonesian trade barriers.

"We hope to set up the framework for the assembling of Proton cars by next year to cater solely for the Indonesian market,' said Kisai Rahmat, Proton's deputy managing director.

Proton has sold cars in 29 countries but its major market is Britain, which has taken 80 percent of the 111,000 units exported so far. Indonesia will become Proton's third Asian market after Singapore and Brunei.

The company is keen to set up assembly operations around the region because Southeast Asia's protected automotive markets give locally assembled models a keen price advantage over imported cars.

Southeast Asian countries have agreed not to start liberalizing their automotive markets until the next century. Proton has grabbed over 60 percent of the Malaysian car market under the shelter of high tariff barriers.