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The government cannot force Proton Holdings Bhd and Perusahaan Automobil Kedua Sdn Bhd (Perodua) to merge, although it can encourage them to forge strategic cooperation to improve the efficiency of parts procurement from vendors, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed has said, according to Bernama.

Mustapa said that both companies have drawn up plans to enhance production, with Proton planning to increase exports to 50% of total production and Perodua giving comprehensive training to its staff to reduce production costs.

“There is very strong competition in the country and the local manufacturers have accepted change and are making many changes of their own, alongside improvements to enable them to compete with other brands,” the MITI minister added.

He was answering a supplementary question from Datuk Noraini Ahmad (BN-Parit Sulong) yesterday in Parliament, on the impact of the competition between Proton and Perodua, as well as from foreign carmakers. Noraini had asked earlier about the 2010 proposal to merge Proton and Perodua, to which Mustapa replied that the government could not force them to do so.

The initial proposal to merge Proton and Perodua was intended to create a more able and globally competitive unit. Mustapa had stated before in 2011 that both companies will not be forced by the government to merge.

Meanwhile, on the subject of the National Automotive Policy (NAP), the MITI minister said that the government has had lots of discussions with stakeholders.

“By year-end, it can be expected that we will have a policy that is good for enhancing the efficiency of the automotive industry. We want our companies to advance and compete from the aspect of price and quality,” he said.