Proton gave more than it received, says Mahathir

Former PM defends pet project as loss-making carmaker seeks more government assistance

Former Malaysian prime minister Mahathir Mohamad yesterday defended his pet project, the national carmaker Proton, arguing that the company has given the government more than it has taken from it.

Tun Mahathir listed details of Proton's contribution to the government since 1985 on his personal blog, with the sum collected by the government from excise duty, sales tax, corporate tax, import duty and goods and services tax amounting to RM24 billion (S$8.3 billion).

The figure is almost double the RM14 billion the carmaker has received from the government in the same period through tax incentives, stimulus packages and special grants.

"Clearly Proton has paid more to the government than government to Proton," Dr Mahathir asserted, a week after he resigned as Proton Holdings chairman amid a bitter spat with Prime Minister Najib Razak.

He said Proton had funded an RM1.8 billion Tanjung Malim plant in Perak and also repaid two seed funds injected by the government earlier amounting to RM400 million.

Besides financial contributions, he claimed Proton provided 12,000 jobs and indirectly created another 250,000 jobs.

Proton also reduced the outflow of funds to more than RM100 billion. Dr Mahathir also claimed that he had not been expelled by the Proton management but had resigned to avoid any fallout between Proton and the government.

"I know I am persona non grata with the government. I do not want to be the cause of Proton's inability to recover because of my presence," he said, urging Proton owners and supporters to help the national carmaker.

The Straits Times has reported that Proton suffered more than RM2.5 billion in losses for the past four years and was looking to the government for a grant to stay afloat, but the request had been threatened by the feud between the former premier and Datuk Seri Najib.

In response to Dr Mahathir's blog post, Communications and Multimedia Minister Salleh Said Keruak said that Dr Mahathir's appeal to Malaysians to support Proton was impractical because buying a car was not simply based on patriotism or nationalism but whether it is value for money.

He said that, when buying cars, Malaysians would consider the depreciation of the car's value and what they can recoup when they decide to sell or trade in the car.

"The issue of market forces and the law of supply and demand dictate what you do. If there is a demand, then you can create the supply," he said.

"But you cannot create a demand by asking Malaysians to buy your product just because they are Malaysian and Proton is also Malaysian."

He added that competition and globalisation were the causes of Proton's poor sales and not the lack of patriotism on the part of Malaysians.

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'Proton gave more than it received, says Mahathir'. Print Edition | Subscribe