It has been reported that national carmaker Proton has applied for financial support from the government – the company has submitted a request for a RM1.7 billion grant from the Economic Council (EC), which is chaired by Prime Minister Datuk Sri Najib Razak, according to reports from The Edge and The Star.

Last week, the automaker said it was seeking reimbursement from the government for the money it has invested in research and development (R&D) to produce new cars.

“We have asked the government to reimburse some of the money we invested on R&D projects. This is a normal practice in the car industry, where incentives are given to carmakers for development of new technology,” Proton chairman Tun Dr Mahathir Mohamad had said.


Back in March, the company was said to have requested for funding from the Ministry of International Trade and Industry (MITI). Proton however denied that it had applied for any development fund from MITI and Petronas, and also dismissed reports that it had committed RM3.8 billion to fund its business plans until 2017.

As for the current request for funding, a source told The Edge that “both the Treasury and the Economic Planning Unit are studying Proton’s request. The amount is just too much, for such a sum to be approved, it would need some form of political intervention.”

Meanwhile, MITI also had something to say about the matter. “Proton has approached us for support. As this requires a budget allocation, MITI has been engaging with the Finance Ministry and the Economic Planning Unit. No decision has been made yet,” Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed told The Star.


Proton’s chief executive officer Datuk Abdul Harith Abdullah, however, told the publication that he wasn’t aware of any recent meeting or presentation made to the EC requesting the amount.

The national carmaker is set to launch a new car, which it said has cost as much as RM300 million to develop, before the end of the year. This new car is expected to be the much-awaited Global Small Car (code-named P2-30A).

Mahathir had indicated that the model would be priced higher than expected to account for better quality. The company, he added, has spent a lot of money to make sure that the best materials are being used.