Dr Mahathir has his eyes set on a new national car company since Chinese automaker, Geely acquired a share in Proton.
“The national car must be owned by Malaysians. The company has been sold to (a) Chinese company, it is no longer a national car”, He told the 24th Future of Asia Conference in Tokyo last year.
Malaysians didn’t take his statement seriously at first. After all, he’s said it before. Surely he was merely swept away by his newfound re-election boldness?
But when it was revealed that Entrepreneur Development Minister Mohd Redzuan Yusof was tasked to seeing Dr M’s vision through, Malaysians got worried.
Nobody wants a repeat of what happened to Proton.
But what went wrong with Proton?
Proton was the brainchild of Dr Mahathir in the early years of his first run as Prime Minister. It was thrust unto Malaysians, much to their chagrin, because it was felt like an additional burden they needed to shoulder.
While Proton did take a lion’s share of over 90% of car ownership in Malaysia soon after it’s launch, this “success” didn’t happen without its costs.
The government provided high amounts of protectionism to prop up the car company from high excise taxes and import duties of foreign cars at almost 300%.
This was made worse by accusations of certain Proton suppliers being cronies who overinflated cheap car parts from greater profit.
Conservative estimates of costs that the public bore over the years because of this protectionism start at over RM300 billion.
3 years ago, Proton received a government bailout with a soft loan of RM1.5 billion which was purportedly taken from the people’s taxes.
Critics are wondering if it’s time to stop hand-holding a car company that barely leaves a dent in the global automotive market.
In 2016, proton stocks were sold to Chinese automaker Geely in a deal brokered under the Najib Razak administration.
Will a third national car right Proton’s wrongs?
If the main point of the third national car was to stimulate the economy, few see eye to eye in the likelihood of this outcome.
Critics argue that instead of launching a new company, the automotive market should be liberalized to force local car companies to compete with foreign brands.
In recent years, Thailand and Indonesia have liberalized their automotive industries to stellar results, even making the top performers in the region.
With Malaysia having one of the world’s highest car ownership rates, the prospect of another local company to drive up sales is a hard sell.
While Finance Minister Lim Guan Eng has reiterated last month that the government will not invest into the project as reported by Malaysiakini, he might have to eat his words now.
Just recently on January 7, the government approved RM20 million in funds as a ‘catalyst’ meant to attract companies to develop the prototype for the new car and fellow politicians are not happy about it.
Out of the 21 shortlisted companies vying to work in the project, Silterra raises the most alarms as it’s owned by Malaysian sovereign wealth-fund Khazanah.
Dr. M has stated that Khazanah has no links with the government and could invest how it likes. But with Dr. M being appointed the chairman of Khazanah, is there really no linkage?
Above all else, the government’s intention to scrap new public infrastructure reportedly due to trillions of Ringgit in debt, perhaps it’s best not to assume that the public can be taken for a ride.