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Malaysia Withdraws Official Support for Proton
KUALA LUMPUR, Malaysia — Prime Minister Abdullah Ahmad Badawi said the Malaysian government is no longer providing special support or protection to the national carmaker Proton. He was quoted by the Bernama news agency.
The result of that decision is that prices likely will rise on Proton vehicles, now that the company no longer enjoys preferential treatment on taxes and other government incentives. Even if the prices on competitors' products don't get much cheaper, the price gap is still expected to narrow with Proton, which has commanded the lion's share of the Malaysian market for a long time.
The company launched its most recent model, the new-generation Saga compact, in January. But Proton's share of the total market has dwindled to around 30 percent, from more than 60 percent through much of the 1990s.
Talks on potential tie-ups with Volkswagen and General Motors ended late last year. Malaysia's DRB-HICOM, which controls Proton's retail distributor, Eon, has submitted a proposal to the government to take a strategic stake in Proton.
In March 2006, Malaysia dramatically reduced import duties on completely built-up vehicles and knocked-down kits.
What this means to you: Don't expect the Malaysian government to lower taxes or excise duty for other brands just because it says it has taken away protection for Proton. — Chips Yap, Correspondent
The result of that decision is that prices likely will rise on Proton vehicles, now that the company no longer enjoys preferential treatment on taxes and other government incentives. Even if the prices on competitors' products don't get much cheaper, the price gap is still expected to narrow with Proton, which has commanded the lion's share of the Malaysian market for a long time.
The company launched its most recent model, the new-generation Saga compact, in January. But Proton's share of the total market has dwindled to around 30 percent, from more than 60 percent through much of the 1990s.
Talks on potential tie-ups with Volkswagen and General Motors ended late last year. Malaysia's DRB-HICOM, which controls Proton's retail distributor, Eon, has submitted a proposal to the government to take a strategic stake in Proton.
In March 2006, Malaysia dramatically reduced import duties on completely built-up vehicles and knocked-down kits.
What this means to you: Don't expect the Malaysian government to lower taxes or excise duty for other brands just because it says it has taken away protection for Proton. — Chips Yap, Correspondent
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