The Xinhua news agency reports that Malaysia's national carmaker Proton said it plans to export 100,000 units by 2008 and open factories in China and Russia to minimize the impact of a regional trade pact.

Last year Proton exported 17,000 units and for the financial year ending March 2006, it plans to export 27,000 cars.

"It (the trade pact) will hurt all the players who have invested in Malaysia -- Proton and Perodua (under AFTA)," Haris Fadzilah Hassan, Proton's strategic planning head told reporters.

Haris said under the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) agreement, competition would be intense in Malaysia since it has the largest passenger car market share in the region and many foreign made cars are already entering the market at cheaper prices.

"We target to export 100,000 units by 2008. As a company we are prepared to meet competition," he said, according to Xinhua.

Proton's current production capacity stands at 380,000 units.

Proton used to sell six out of every 10 new cars in Malaysia but growing foreign competition is eating into its market share, which fell to 44 pct last year from 48 pct in 2003, the report added.

Malaysia cut import duties to 20 pct on ASEAN cars on Jan 1 under the AFTA agreement.

In January the government decided to delay implementation until later in the year pending a review of the tariff structure on concerns that foreign car companies might shelve fresh investments or even relocate current Malaysian operations.

However, it will delay reducing duties to the required level of below five percent until 2008.

Haris said Proton will push the sale of Proton's latest sports model, the GEN-2, Waja and Savvy models for export.

Proton's key markets now are neighboring Singapore, the UK and the Middle East, he said.

On plans for Russia, Haris said Proton hopes to begin exports as early as next year and when sales volumes increases it would consider a production facility.

"Maybe in January we will be able to sell our cars in Russia. We will look at the demand before considering a production facility," he said.

But Haris lamented that its plan for a production plant in China had not taken off.

"They (the Chinese authorities) keep asking us questions," he said.

Officials had previously said that Proton was partnering Goldstar Heavy Industrial Co and has plans to set up operations in Humen city in southern Guangdong province.

Haris also said that Proton hoped that under the new auto policy to be announced in September, the government would look into providing grants to Proton to acquire foreign companies with technical capacity.