Proton Takeover Will Rationalise Car Production Capacity

KUALA LUMPUR, Jan 19 (Bernama) -- DRB-Hicom's takeover of Proton Holdings Bhd will result in the rationalisation of the country's automotive production capacity, says International Trade and Industry Minister Mustapa Mohamed. He said the country's car industry was only currently operating at 50 per cent capacity and this was a major issue within the industry. To overcome this, he hoped DRB-Hicom would assist Proton to realise its full potential like its collaboration with Volkswagen to produce Volkswagen models at its plant in Pekan, Pahang, he told reporters after the ministry's monthly gathering here on Wednesday. Mustapa also said all car manufacturing companies in Malaysia enjoyed the same incentives, across the board, since the government liberalised the entry of foreign car makes like Toyota, assembled in Thailand, into the country duty-free. "The perception is that the government has given many incentives to Proton, but in actual fact they (other car manufacturers) are also operating on an almost equal level playing field," he added. As for market share, Proton was the market leader at one time but today Perodua has overtaken the top spot. "As such, the government will continue to give incentives to Proton," Mustapa said, adding that incentives has been given to assist Proton in its energy efficiency development programme. "However, we are emphasising on localisation in our automotive production. This means whichever company that uses local components would receive more incentives than others," he added. Meanwhile, Mustapa said the National Automotive Policy would be reviewed following DRB-Hicom Bhd's take over of Proton Holdings Bhd. He said the government's focus now was to enhance capacity, encourage energy efficient vehicles and penetrate export markets. Earlier, Mustapa said his ministry would double efforts to step up domestic investments with emphasis placed on promoting the services sector during investment promotion mission abroad. He said MITI would hold discussions with corporate leaders and offer specific incentives to encourage them to continue with their domestic investments. "We are also undertaking a review of current incentives given in collaboration with the Malaysian Investment Development Authority and the Finance Ministry," he added. -- BERNAMA Malaysia