Let Proton stand alone before challenging the world, says expert

 

Prime Minister Anwar Ibrahim at the launch of Proton’s first hybrid electric model, the X90, earlier this month.

PETALING JAYA: Proton must first dominate the local automotive market without any form of tax protection before it can take the lead in making Malaysia an automotive export hub, says a transport expert.

Transport consultant Rosli Azad Khan said Proton had something to offer the global market thanks to its tie-up with China car manufacturer Geely, but has yet to prove itself in a free competition environment.

He said Proton had been protected through higher taxes on imported cars since it was first established in 1983. This protectionist policy has deterred foreign investors from investing in the country’s automobile market, Rosli added.

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“We need to revisit this policy of imposing higher taxes on imported cars. Revise the import tax structure on vehicles,” he told FMT.

“Many car manufacturers shied away from setting up their plants in Malaysia and went to Thailand and China instead, and now Vietnam” as those countries do not have protectionist policies, he said.

He also suggested that Proton should venture into electric vehicles as many countries were shifting from petrol engines to electric motors as the technology was cheaper, more manageable and just as reliable.

Rosli’s comments come in the wake of Prime Minister Anwar Ibrahim’s call to Proton to help make Malaysia become an automotive export hub.

However, industry experts said Proton and Perodua could not keep up with global developments because of protectionist measures such as high tariffs, import duties of approximately 30% for cars from non-Asean countries, and the requirement for approved permits to import foreign cars.

In August 2020, then entrepreneur development and cooperatives minister Wan Junaidi Tuanku Jaafar called for the policy to be re-examined, saying it had stifled investment by foreign car manufacturers.

Meanwhile, economist Geoffrey Williams of the Malaysia University of Science and Technology believed the domestic market will remain Proton’s main market until the company can ensure its overseas sales, service, and support systems are in place.

“Whether the Malaysian automotive industry can become a good export earner depends on having good (car) models but it also depends on having a very strong sales and servicing infrastructure overseas,” he said. - FMT