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Last week, it was announced that Proton and PT Adiperkasa Citra Lestari had signed a memorandum of understanding (MoU) to develop and manufacture an Indonesian national car. The MoU was signed by Proton CEO Datuk Abdul Harith Abdullah and PT Adiperkasa Citra Lestari CEO Abdullah Mahmud Hendropriyono.

Present at the signing was Prime Minister Datuk Seri Najib Tun Razak and Indonesian president Joko Widodo,, who was in town for a three-day official visit, as well as Proton chairman Tun Dr Mahathir Mohamed.

Now, barely a week later, news has come about that the planned project is not to build an Indonesian national car. With criticism mounting over the announcement of the deal in the republic, Joko has clarified that the cooperation agreement between the two companies is not intended for the development of a national car.

“If we were to talk about the national car, I will of course talk about Esemka,” he was quoted as saying by Kompas. Esemka is a collaboration between a number of vocational schools in Solo, Central Java, which designs and builds vehicles. It was reported that Joko had championed the brand when he was the mayor of Solo, and had used the marque as his official car.

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The MoU, Joko added, is strictly a business-to-business agreement between both parties, with no taxpayers’ money involved.

Some parties have of course expressed doubt that public funds would not be involved, while others have said that a national car is not what the public needs, adding that Jakarta should refrain from giving Proton any tax incentives or duty exemptions despite its role in the car programme.

The MoU aims to further business opportunities between the two companies where development and manufacture of the proposed vehicle project are concerned. As reported last week, a feasibility study is set to be conducted, including the potential development and manufacturing of the project in Indonesia.

Subject to the completion of a successful feasibility study, Proton and PT Adiperkasa Citra Lestari will then sign a definitive joint-venture agreement for the proposed project. The MoU, it was added, is merely an expression of current intentions and isn’t binding on both parties. It’s early days yet, but at least one thing is for sure now – whatever comes out of this project won’t constitute an Indonesian national car.