Selling Proton to foreigners will hurt Malaysia, warns Mahathir

Selling of the controlling stake in national carmaker Proton to foreigners will not be beneficial for the country, warned former premier Dr Mahathir Mohamad.

"My fear is that if we do not own Proton anymore the Malaysian automotive industry will suffer a great loss.

"The vendors and suppliers of components will close shop. Lots of workers will lose their jobs. And Malaysia’s engineering capacity will be reduced," wrote Mahathir on his blog today.

Consequently, he said Malaysia will not be a developed country by 2020 or even later, and that Malaysia will remain a third world developing country.

Mahathir, who was Proton's advisor after stepping down as prime minister in 2003 until 2016, said he was sad that the firm now had to be sold to foreigners.

"Having a strategic partner is okay. But once Proton is sold to foreigners it will cease to be a national car.

"It will just be producing foreign cars in Malaysia. That is something we have been doing since the 1970s," said Mahathir.

Mahathir argued that while Proton may not be profitable now, it was very profitable before, though he admitted that his was because the national carmaker was protected.

Other ways to help Proton

He claimed that even after protection ceased, Proton may continue to be competitive.

He said all countries protect their automotive industry, though it may not be through high import duties, as there are other ways of preventing imports from challenging locally made cars.

"That is why Proton cannot be exported to these countries. We are very generous. Anybody can export their cars to this country. Sub-standard cars too can be imported," he said.

As part of its turnaround plan mandated after a government bail out following financial issues, Proton needs to find a foreign partner, which may lead to the sale of more than 51-percent stake in the automaker.

Several firms, most notably Peugeot parent, PSA Group and Chinese carmaker Geely are both currently in talks with Proton.

Mahathir helped found Proton when he was premier and has been the firm's champion until his removal as advisor to the company last year.

Proton was one of the cornerstones of Mahathir's plan to industrialise Malaysia, and fuel Malaysia's rise into an industrialised and developed nation by 2020.- Mkini