Malaysia's third national car project set for launch in 2020, minister says

The first national car project, to produce the Proton vechiles, was launched in 1983 as part of Dr Mahathir's industrialisation drive in his first term as prime minister. PHOTO: AFP

KUALA LUMPUR - The Malaysian government is set to launch its third national car project by 2020 as envisioned by Prime Minister Mahathir Mohammad, said Entrepreneur Development Minister Mohd Redzuan Yusof on Saturday (Aug 4).

The government believes that the project could revitalise the national automotive industry, Mr Redzuan was quoted by Bernama news agency as saying.

"We attempt to revive and grow the industry due to its tremendous potential," Mr Redzuan told reporters after officiating at the TOC Automotive College convocation ceremony according to Bernama.

"Besides, auto component manufacturing is also one of the sectors that drives small and medium enterprises (SMEs)."

The plan by Tun Mahathir to launch the third national car project has raised eyebrows as it could involve high start-up costs at a time when the government has vowed to cut spending to reduce a RM1 trillion (S$330 billion) debt.

Additionally, Dr Mahathir had earlier agreed with his coalition partners that he would hand over the country's leadership to Anwar Ibrahim after around two years.

Some critics say the government should perhaps direct its efforts and funds at expanding and improving public transport such as the MRT and LRT, and national rail networks.

The first national car project, which produced the Proton vehicles, was launched in 1983 as part of Dr Mahathir's drive to industrialise Malaysia in his first stint as prime minister.

Proton dominated the Malaysian market with its relatively low-priced models in the 1990s, netting a market share of 74 per cent at its peak.

But the brand has need millions of dollars in government funding over the years and by last year, only 14 per cent of cars sold in Malaysia were Protons.

Chinese carmaker Zhejiang Geely Holding Group bought a 49.9 per cent stake in Proton last year.

The second national car project has been more successful. Japan's Daihatsu Motor Corp is a key shareholder and the project's Perodua brand produces the most popular vehicles in Malaysia today.

Attending a conference in Japan in June, Dr Mahathir floated the idea of a new national car that can access the global market, and be built in collaboration with Asian partners like Thailand, Japan, China and South Korea.

In his speech on Saturday, Mr Redzuan said the government needed the support of the auto industry, as well as knowledge, skilled and talented graduates to succeed in its the dream.

"In the past, we tried to grow the automotive industry by creating our own car, but obviously, we need to work on the timeline.

"This had put a lot of challenges that we see today where Proton has been compromised," he was quoted by Bernama as saying.

Hence, Mr Redzuan said the government would refine and improve from "what and where went wrong" in the Proton carmaking.

Join ST's Telegram channel and get the latest breaking news delivered to you.