Malaysia Auto Industry Catching Up with Rivals

Global Business

Launched in 1983, Malaysia’s national car company Proton was touted as a stepping stone on the road to developed-nation status. Analysts say that instead, measures taken to protect Proton from international competition have forced Malaysians to pay inflated prices for all cars. It has caused Malaysia to miss out on becoming a regional automotive hub although the government is now trying to change that, as Rian Maelzer reports from Kuala Lumpur. 

Malaysia Auto Industry Catching Up with Rivals

Malaysia Auto Industry Catching Up with Rivals

Launched in 1983, Malaysia's national car company Proton was touted as a stepping stone on the road to developed-nation status. Analysts say that instead, measures taken to protect Proton from international competition have forced Malaysians to pay inflated prices for all cars. It has caused Malaysia to miss out on becoming a regional automotive hub although the government is now trying to change that, as Rian Maelzer reports from Kuala Lumpur.
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It was the brainchild of Malaysia’s then-prime minister Mahathir Mohamad. In the late 1980s, two out of three cars on the road here were Protons.

Hefty import duties pushed up the prices of the foreign competition. But despite that, Proton’s local market share has slipped to just over 20 per cent, its exports remain modest, and it has been overtaken by another domestic carmaker Perodua, which is partnered with Japan’s Daihatsu.

A big handicap, analysts say, is that Proton has to source parts from local vendors, few of whom are up to international standards of quality or efficiency.

Malaysia is the biggest market for passenger cars in South East Asia but its protectionist policies have meant that major foreign car makers have chosen to invest elsewhere in the region.
Malaysia’s new auto policy announced earlier this year does aim to make the country a hub for manufacturing energy efficient vehicles.