If Cabinet cannot take the decision on  Proton’s  relinquishing majority stake and control in a strategic partnership with a foreign partner, then let the decision be taken by Parliament next month
 

Media Statement
by Lim Kit Siang  

(Parliament, Tuesday): All eyes are turned on the Cabinet meeting tomorrow, not only on whether the long-running APs saga will be brought to an end with a full and satisfactory explanation to the multitude of questions which had surfaced in the past two months, including the fate of the Minister for International Trade and Industry, Datuk Paduka Rafidah Aziz, but on whether a new National Automotive Policy would be announced to give fresh directions for the automotive industry in the country capable of facing up to  the challenges of globalization, and in particular AFTA and WTO.

Two recent news in the automotive world should be food for thought  for Cabinet Ministers mulling over the options for a new National Automotive Policy, viz:

General Motors Corp plans to buy US$1 billion worth of automobile parts from India each year by 2008 as part of cost-cutting efforts at the world’s biggest automaker.  GM is among several automakers – including Ford Motor Co., DaimlerChrysler AG, Volkswagen AG – that are sourcing auto parts from low-cost countries because of tough competition and rising cost of materials.  It is reported that auto parts in India cost 25-30 per cent less than in North America or Europe, and are also around 15 per cent cheaper than South Korea and Mexico but the quality is on par.  Malaysia does not appear in the radar of such international sourcing of auto-parts by the global automobile giants.

In the first six months of 2005, about one-third of  Thailand’s total vehicle production of 517,829, which includes over 350,000 trucks, were exported. In 2004,  over  332,000  vehicles - one-third of Thailand’s total vehicle production for the year of  927,981 vehicles, which includes 597,914 trucks - were exported to destinations ranging from Argentina to South Africa.   In contrast, Proton exported 17,243 units for the financial year ending March 2005 as compared to 7,338 units the previous year.

These two snippets are fresh reminders as to how after two decades of protection, forcing one whole generation of Malaysians to buy cars which are more expensive and of lower quality than those available in  other countries, Proton is still so uncompetitive that there are calls for another generation of 20-year protection for Proton.

One important question that  must be decided in the new National Automotive Policy is the future of Proton. If the  Cabinet cannot take the decision on  Proton’s  relinquishing majority stake and control in a strategic partnership with a foreign partner, so that Proton can become truly competitive and face up to the challenges of globalization, then the Prime Minister should allow the decision to be taken by Parliament when it meets next month.

(09/08/2005)