MALAYSIAN GOVT HAS NO INTENTION OF DIVESTING EQUITY IN PROTON TO FOREIGN COMPANIES

KUALA LUMPUR, March 29 (Bernama) -- The Malaysian government has no
intention of divesting its equity in Proton Holdings Bhd as it does not want the
national car manufacturer to be controlled by foreign parties, the House of
Representatives was told here Monday.

Deputy Finance Minister Chor Chee Heung said Proton was currently
negotiating assembly and product joint venture possibilities with several
original equipment manufacturers.

However, he said the discussions did not involve equity participation but a
strategic partnership to enable Proton become more innovative, domestically and
internationally.

"It needs to be stressed here that future negotiations involving equity
participation by foreign parties must be based on a win-win situation and take
into account the interest of the automotive industry in Malaysia and on
preserving the Proton brand," said Chor in reply to Mohamed Azmin Ali, a Member
of Parliament (MP).

Mohamed Azmin had asked the Ministry of Finance if the government had any
intention of divesting its equity in Proton to interested parties besides
upgrading the automotive industry's competitiveness in Asean.

In a supplementary question, Mohamed Azmin also asked if the government
would continue to inject funds into Proton in the name of "protectionism or
nationalism" while the automotive industry had yet to contribute to national
coffers.

Chor said Malaysia's automotive policy varied compared with Thailand
and the government was planning on ensuring Proton's success.

"It cannot be denied that many foreign companies operating in Thailand have
been able to manufacture different makes of cars for the global market.

"But one must take into consideration Proton's original objective when it
was established. We, at the Finance Ministry, have seen Proton's performance
improve tremendously," he said.

Citing an example, Chor said Proton sold 153,000 Proton cars of all models
domestically last year and exported 25,000 units overseas.

From the socio-economic aspect, Chor said Proton has achieved its objective
as a majority of the low-income group were now able to own cars.

Besides, the National Automotive Policy and the Third Industrial Master Plan
had outlined the government's effort to ensure the automotive industry continued
to remain competitive domestically and internatinonally.

Among steps taken include the establishment of the Automotive Development
Fund to assist manufacturers, assemblers and component manufacturers improve
output via easy loan schemes to rationalise their business, equipment
manufacturing, higher productivity and increased exports.

He also said the government constantly reviewed current policies and took
into consideration views and feedback from all in the automotive industry.

-- BERNAMA