Dr M blames gov't for Proton's financial problems

The government is responsible for Malaysian carmaker Proton's financial woes, as it had delayed the disbursement of promised research and development grants, former Proton chairperson Dr Mahathir Mohamad says.

He stated this after Tourism and Culture Minister Nazri Abdul Aziz had said Proton was one of the former prime minister's "white elephant" projects.

"The government pays for research and development in manufacturing, but even when there were funds allocated for Proton, the government was late in supplying it due to budget constraints.

"Proton then used its own funds to develop three new cars and this has caused it to face financial problems," Mahathir said in a blog post yesterday.

Mahathir, who said his three Proton cars have never given him problems, added that the carmaker first faced issues when the government allowed widespread import of foreign cars.

This despite Proton being barred from entering the countries from which these foreign cars originated, he said.

"Yes, Proton has flaws, but its technology is suitable for Malaysia, Australia and Asean countries and it has European technical assistance.

"The problem is the cash flow due to the entrance of foreign carmakers who have eaten up Proton's market share," Mahathir wrote.

He said foreign car makers have a larger capacity and are able to flood the international market with their cars, to Proton's detriment.

He said protection for Proton was not the cause for high car prices in Malaysia, instead it is due to a rise in import duties.

"The cost of imported cars have always been high, even before Proton existed, including when cost of living was lower," he said.

He added that during his tenure as prime minister, Proton collected up to RM4 billion in profits and built a plant costing RM1.8 billion without government or commercial loans.

It also paid a total of RM18 billion in taxes, he said.

Proton, a one time national car, was Mahathir's brainchild.

It is now owned by DRB-Hicom.- Mkini