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MALAYSIA: Government will prop up Proton

By just-auto.com editorial team | 12 July 2007

Proton will not be allowed to go bust, even if a foreign cooperation deal does not occur.

Hilmi Yahaya, finance ministry parliamentary secretary, was quoted by national Bernama news agency as telling parliament: "The government will not let Proton die because it is our national car and we need to preserve the country's reputation," according to the Associated Press (AP).

Proton is still talking possible alliances with Volkswagen and General Motors and a final decision is expected by the end of the year, he said.

AP noted the official had been asked if Proton, losing both money and market share since access by imported brands was loosened up, by duty cuts and a free trade agreement, will pack up if it fails to find a foreign partner.

Hilmi reportedly attributed Proton's poor performance to a lack of economies of scale due its low production rate of less than 200,000 units a year, as well as weak exports, and said the government, which owns 43% of Proton through investment arm Khazanah Nasional, would explore all opportunities to turn the automaker around.