Proton LogoMinister of International Trade and Industry Tan Sri Muhyiddin Yassin says Proton’s vendor system will have to be discussed as an independent study conducted by a Japanese company revealed that parts prices in Malaysia were up to 50% higher compared to parts sourced for Japan. He found this to be very odd.

I can think of a few reasons why this is happening – cronyism and monopoly protection could be one reason, the another could be the lack of economies of scale by local component suppliers as they do not have the large orders book of Japanese component suppliers who are supplying components in much larger volumes.

I am pretty sure that the 50% higher price is not because our local components have 50% higher quality.