KUALA LUMPUR • The Malaysian government is reviewing the national automotive policy, which may include imposing conditions on the import of foreign vehicles.

Prime Minister Mahathir Mohamad said in Parliament yesterday that while the government agrees with the practice of free trade, other countries worldwide impose conditions for their own auto markets.

He cited the example of European emission standards, which define acceptable limits for exhaust emissions of new vehicles. He said: "But here, any cars produced, even those made out of Milo tins, can enter the Malaysian market so it is very open. Any car producer can enter our markets - that is the problem we are facing.

"As such, we are looking into imposing certain conditions to disallow cars from (arbitrarily) entering local markets."

This will allow brands like Proton to capture the local market, said Dr Mahathir, answering a question from Ayer Hitam MP Wee Ka Siong, who asked for elaboration on the government's plan for a third national car project.

"All the countries which produce motor vehicles have got restrictions, either on standards or because of taxes... so we need to protect our infant industry," Dr Mahathir added at a press conference in the Parliament lobby.

"We may think about the standards (to impose). We also may have to consider certain weaknesses that we have, which should be protected," he said, without elaborating.

Dr Mahathir said the national automotive policy would also be reviewed to ensure local national car manufacturers like Proton and Perodua remain competitive. He also said the auto industry is vital for a country's growth and that a new national car project would help boost Malaysia's engineering capabilities.

In June, Dr Mahathir said Malaysia should have a third national car, a suggestion which was met with some criticism. Besides Proton, the other Malaysian automakers are Perodua and Naza.

THE STAR/ASIA NEWS NETWORK, REUTERS