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.