Proton told to set sights abroad

Proton told to set sights abroad

Agence France-Presse, Tanjung Malim, Malaysia

Malaysia's prime minister on Saturday told Proton to set its sights abroad as he launched the national carmaker's 1.8 billion ringgit (US$474 million dollars) new manufacturing plant.

Abdullah Ahmad Badawi, who is also finance minister, said Proton had become the country's national pride but added the company needed to improve the quality of its vehicles and boost its global competitiveness.

"Proton can't escape having to compete. It is a challenge they must meet," he told a news conference after officially launching the plant.

"We will give them the backing and the support but the support is for them to produce cars of high quality and that are priced competitively in the market not only in Malaysia but also abroad."

Proton's sales are suffering amid increased competition from foreign auto giants and three other national carmakers as the Malaysian auto market gradually opens up under a regional free trade pact.

Abdullah said the new Proton plant, which has an output of 150,000 units a year and could be ramped up to one million units eventually, was a key step in Malaysia's effort to become a regional auto manufacturing hub.

He declined to say if the government would provide further tax relief to Proton, but told them to "work hard and make good cars."

Asked if Malaysia could support four national carmakers including Perodua, Naza Kia and Inokom Hyundai, he said: "The market is not only Malaysian market but is beyond Malaysia, so I don't believe it's too many."

"At the moment, there is no talk about merging (the four national carmakers). I won't know about the future."

Abdullah also denied reports former premier Mahathir Mohamad, who was appointed adviser to Proton last year, was interfering with management efforts to revamp the long-protected automaker.

"No, no, I appointed Dr. Mahathir as an adviser not only yesterday. Stop all these allegations. That's never been an issue," he said.

Mahathir, who retired in October 2003 after 22 years in power, created the company in 1983 as part of Malaysia's drive into heavy industry.

Proton used to sell six out of every 10 new cars in the country, but its market share fell to 44 percent last year, from 48 percent in 2003.