Malaysian government relinquishes national protection for Proton

In an epic move since the reduction on import duties on completely built-up (CBU) vehicles and complete knocked-down (CKD) locally assembled cars, Prime Minister Abdullah Ahmad Badawi announced yesterday, that the Malaysian government will no longer provide any means of extraordinary sustenance or protect the interests of national carmaker Proton.

With failed talks on potential tie-ups with Volkswagen and General Motors towards the end of 2007, Malaysian giant DRB-HICOM (the company that oversees and controls the distributor of Proton vehicles, Eon) has proposed to the government in order to take over a substantial amount of stakes over at Proton.

Prices of Proton vehicles are expected to rise as there are no more additional benefits on government taxes and other subsidies given to the national carmaker. The move forces Proton to further push its level of product competitiveness against the immensely successful Naza and Perodua brands, as the price gap is likely to narrow.

Proton debuted it's latest model - the Saga compact, in January, but even so, their total market share has suffered a downward spiral to approximately 30 percent - that's half of their 60 percent share during the better part of the nineties.