The National Automotive Policy (NAP) is under review to ensure that the country’s automotive industry remains competitive, said prime minister Tun Dr Mahathir Mohamad. According to a Bernama report, the review of the NAP relates to the development of the industry which includes the national car project, the development of local companies, research and development as well as to increase exports.

The national automotive industry, involving Proton in particular, suffered a decline in the past 10 years due to the policy of allowing cars to be imported into Malaysia, while locally produced automobiles destined for overseas markets have been subject to conditions such as compliance with Euro 5 emissions standards, the prime minister said.

“These countries have huge plants and produce millions of cars annually and they impose restrictions on cars entering their markets,” Tun Mahathir said in reply to a question by Ayer Hitam member of Parliament, Wee Ka Siong. Additionally, financial assistance was granted to Proton only after a part of its equity had been sold to a foreign company, while Proton had long since sought government assistance, Dr Mahathir said.

“In the past, Proton penetrated the Malaysian market and overseas markets. We were able to sell 25,000 Proton cars to the United Kingdom and elsewhere but the performance of the Proton venture declined due to the lack of efficiency of the previous administration which had little knowledge of the industry, and the previous government also allowed the entry of all kinds of cars into Malaysia,” he said.

The prime minister said that he is convinced Proton would be able to achieve the success it had attained in the past if it was assisted by the government, and in this regard the Pakatan Harapan government would reform the national automotive industry in order to grow the sector as a whole as well as its sub-sectors, while creating high engineering capabilities among the people, he said.

The government was aware of free trade practices that do not restrict the entry of goods via high taxation, the report quoted Dr Mahathir as saying. “That’s why we have to look at the possibility of certain conditions. Foreign cars cannot be allowed to enter the country easily and dominate the local market. We are looking into this,” he said.

The Malaysian government is also willing to work with any company which has the expertise required for the production of the third national car brand, the prime minister said. “But, we have to be in control (in terms of equity ownership) and take on a meaningful role in the management of the company,” he noted.

A new national car project must be backed by the private sector, rather than banking on public funds, said finance minister Lim Guan Eng in an interview last month. Your thoughts, dear readers? Will protectionism work out in the long run?