Free Proton from state support
I AGREE with comments made to caution our government regarding the third national car, as the risks are high given the limited size of the domestic market and the advancing technologies in industrial countries which are beyond Malaysia’s capacity to compete. If there is a proposal for a third car project, let it be a private venture with no government or GLC involvement.
Malaysians have supported the first national car, Proton, with high tariff protection for many decades, resulting in car prices in Malaysia being higher than overseas. Car tariffs in Malaysia are the second highest in the world. As prices are high, many young people get into debt when buying their first car, especially those earning low salaries.
If domestic prices are in line with international prices, cars would be more affordable for lowincome earners.
There was a plan under the National Automotive Policy (NAP) to progressively reduce the tariff protection on cars to create a competitive environment in the industry.
But after the initial reduction of tariff, the plan met strong resistance from politically-linked groups, claiming that the NAP would result in loss of jobs for thousands of Proton factory workers and engineers and that several ancillary businesses related to the car industry would go out of business.
Political sensitivities made the NAP difficult to implement indicating that protection, once given, becomes sticky to remove even though Proton is no longer owned by the government. It is now owned by MRCB-Hicom, a public company. Proton continues to expect government financial support for its R&D claiming that this was promised under the NAP, a never-ending story of reliance on the government to survive the competition.
Thankfully, Proton has been restructured with a foreign partner from China, which is a global player in the car industry and has the technology and the track record to make it into a successful partnership.
As Proton is getting ready to go international with the foreign shareholder, the government should free it from state support. Let us hope the government will make the joint-venture company operate in the free market and that this will result in lower prices and more choices for consumers.
The third national car should not claim the infant industry argument to get market protection. Whether the project is producing a conventional, an electric, or energy-saving car, if it is not commercially viable as a private venture, it is not good enough for the economy.
Tan Sri Mohd Sheriff Mohd Kassim Kuala Lumpur