Malaysia's deputy prime minister has suggested that the country's carmaker Proton must find a foreign partner if it is to compete in the open market, as the state will not continue to offer the business unconditional support.

Najib Razak said Proton needed a powerful foreign ally to help it break into developing markets such as China and India as well as launching new car models, while cutting its research and development costs.

In return, any foreign investor could expect to benefit from access to the Malaysian market, and Southeast Asia in general.

However, potential partners will have to accept that they will not gain control of Proton, which has benefited from state aid and protective tariffs since its launch in 1984.

"No, we shall not simply tear down the protective barriers and immediately throw our national automotive industry to the wolves of unbridled competition," Najib said at an automotive conference. "We have developed this industry at great cost and with great effort."

But he added that the state support for Proton and rival Perodua will be "targeted, finite and transitional, not open-ended and unconditional."

The government owns a 42% stake in Proton through its investment arm Khazanah Nasional.