Malaysians question government coddling of national carmaker

Malaysians question government coddling of national carmaker

For many in Malaysia, Proton is the car of choice. Each year, roughly 200,000 people in Malaysia buy a Proton. But with free trade cropping up at the moment in the region, Malaysians are starting to question a policy that has protected the national carmaker since its birth in 1983. Many Malaysians have criticised the car for its engine and rust problems. Nevertheless, for many, it was a price decision, whereby a Proton Wira sells for about 50,000 ringgit. Proton (Perusahaan Otomobil Nasional), the brainchild of Prime Minister Tun Dr. Mahathir Mohamad, came into being as part of a national drive to break the mould of a commodities-based economy and become a manufacturing powerhouse. 

It is a development model that has been tried in various corners of the globe, with varying degrees of success. Proton launched its first model, a rebadged Mitsubishi called the Saga, in 1985, but it still falls sort of the 350,000 annual sales it once described as the key to economies of scale. Protecting Proton ensures that the prices Malaysian motorists pay for new foreign cars are among the highest in the region. The Waja, Proton’s flagship model, retails new at 60,000 to 70,000 ringgit. A similarly sized, Toyota Corolla 1.8G costs nearly 122,000 ringgit. Indonesians may fare little better than their richer neighbours in Malaysia, facing on-the-road bills of 114,000 ringgit. 

But in Thailand, according to Bangkok-based Automotive Resources Asia, the Toyota sells for 91,200 ringgit and in the Philippines, it costs just 66,120 ringgit. Malaysia, arguing national firms Proton and Perodua needed time to adjust, won a two-year reprieve for its car market under the latest phase of the Association of South East Asian Nations Free Trade Area (AFTA), which took effect on January 1. Mahathir broke the news in November, telling Malaysians new taxes would replace existing import tariffs on January 1. That statement came as a shocker to many such as Lim Kit Siang, chairman of the opposition Democratic Action Party, who added that Proton had enjoyed protection for long enough. 

The Consumers Association of Penang, which campaigns on national issues, had also joined the debate. In It’s magazine It stated that nobody seriously expected the Malaysian government to concede the dominant position of Malaysian-made cars in the local market without a fight. The big question, though, was why the Malaysian car industry, that has been given 15 years to mature, still needed mollycoddling.