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Lesson from Proton's failure

  • The automobile industry can only be supported by a considerable market which Malaysia lacks, not to mention our deficient industrial infrastructure and technology

Sin Chew Daily

PM Mahathir has introduced a number of new measures ever since he took over the helm a month ago, his most recent announcement being the government's intention of creating a new national car brand.

In the 1980s, Mahathir was very ambitious to kickstart the country's heavy industrial development by launching the Proton national car project. Proton used to have its better days when it captured a sizeable chunk of the local automobile market and commanded the collective memories of many Malaysians.

Unfortunately the good time did not last very long and the uncompetitive automaker failed to sustain its lead with its sale declining by the year. The glorious past of Proton could not be restored despite the many government efforts to bail out the company and inject astronomical sums of money. This shows that government determination and financial handouts alone will not support the country's car-making industry.

The government has been shouldering this immense financial load until China's Zhejiang Geely Holding Group acquired Proton's 49.9% equity last year.

Following the equity shift, many people, including Mahathir himself, no longer see Proton as national car. Mahathir has put it candidly that Proton is no longer the country's national car following its sale to a Chinese company, and that the government mulls building a new national car brand.

Having said that, creating a new automobile brand is not an easy thing. There are many conditions and challenges that need to be taken into consideration.

The automobile industry can only be supported by a considerable market which Malaysia lacks, not to mention our deficient industrial infrastructure and technology. Forcing through a new national car project will only render our hard effort and resources in vain.

According to Mahathir, the new national car project can work with automobile industries in Thailand, Japan, South Korea and China by absorbing their technologies.

It is undeniable that the automobile industries in the countries mentioned above have reached very high levels of technological sophistication when compared to ours, but the thing is, how we are going to effectuate the technology transfer and absorb their state-of-the-art manufacturing technologies in a bid to lift our own, and these countries will not transfer their technologies to us unconditionally.

Another inevasible question is capital. The automobile industry warrants huge capital input. How are we coming up with the money given our sky-high RM1 trillion debts?

Proton's failure should serve as a valuable lesson for us. It is hoped that the new Pakatan Harapan government will take cue from it and move as per our strengths to prevent us from sinking deeper into the quagmire.

 

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