Learn from Proton, drop idea of having a 3rd national car

Dr Mahathir should not be so naive as to not know that Japanese auto makers will teach us how to make everything except the engines and the gear boxes - which we will have to buy from them.

COMMENT

By Koon Yew Yin

Prime Minister Dr Mahathir Mohamad has sought the assistance of Japanese automakers, including Nissan Motor and Toyota Motor, to start work on a potential third national car project, according to a Nikkei Asian Review report.

Accessing Japanese automotive expertise would be “essential” to manufacture cars of a high standard, Dr Mahathir said on the side-lines of a four-day working visit to the city of Fukuoka.

The Nikkei report said some market players had insisted that Malaysia’s annual vehicle sales of just under 600,000 units did not provide the economies of scale needed.

Dr Mahathir was instrumental in launching the Proton car project during his first stint as prime minister in the 1980s.

It has since been partly sold to Chinese manufacturer Zhejiang Geely Holding, after suffering losses for many years since its inception.

Even after the bad experience with Proton, Dr Mahathir has not learned his lesson. He is being naïve to expect Toyota and Nissan, successful Japanese car manufacturers, to help him or Malaysia by providing technical know-how to manufacture a Malaysian national car to compete with them!

He should remember that Proton teamed with Mitsubishi Motors of Japan to tap Mitsubishi’s technical know-how to manufacture Proton. But Mitsubishi merely used Proton to manufacture and market Mitsubishi’s own models in Malaysia, without any technology transfer at all to Malaysia!

Now the Chinese car manufacturer Geely has bought 49% of Proton and you can expect Geely to do exactly what Mitsubishi did before.

Dr Mahathir is so powerful that no one would dare to oppose him in any way. No minister and member of Parliament would dare to tell him to forget about his dream car.

Since I am not a politician and no longer doing business, I am not afraid to tell the truth. I speak my mind and I don’t care what people think of me. But I care that I move people, hopefully for the best. Truth must be spoken loud and clear if I want to spread my useful opinion.

I think it is unwise to start the third national car so quickly without thinking through the whole project, especially the cost/benefit factors and its ill effect on all Malaysians.

Here are my suggestions:

• Since the project will cost more than one billion ringgit, Dr Mahathir should consult his council of advisers. I am sure they will tell him not to start his dream car.
• Toyota and Nissan are not charity organisations. They are commercial business operations and their main objective is profit. They will teach us how to make everything except the engines and the gear boxes which we will have to buy from them. We have no alternative and we must pay whatever they ask for. We cannot bargain.
• Since our entire car market is only about 600,000 cars a year, we do not have the economies of scale. Moreover, we cannot make the car cheaper than Toyota and Nissan so we cannot export them.
• There are already a lot of traffic jams in Kuala Lumpur and also along the North-South highway, especially during festive seasons. There are already too many cars on the roads. The government should be thinking about how to reduce the number of cars instead of making more cars.
• One sure way to reduce the number of cars is to construct a high speed railway (HSR) from Johore to Penang. The Chinese HSR can travel faster than 300 km per hour. That means it will take about one hour to travel from Prai to KL and another one hour from KL to Johore Baru. If we have HSR very few will want to drive and fly to their destinations. You must bear in mind that all the cars from the highway will ultimately end up in the big cities. If we have HSR, most people will not want to drive their cars.
• Almost all the crowded cities in the world are trying to reduce air pollution. Polluted air causes a vast variety of illnesses. It is as if all the people are forced to smoke cigarettes. The best way to improve public health is to reduce the number of cars on the roads.
• The government must realise that the cost of maintaining a car is quite a burden on each family. If a family can do without a car, they will have more money to spend on other essential necessities. The government should not start the third national car project to encourage car ownership.

I hope Dr Mahathir will see the folly of having another national car.

Koon Yew Yin is a reader of FMT.