PROTON AIMS FOR 3-FOLD ECONOMIES OF SCALE BY 2015, PARLIAMENT TOLD

KUALA LUMPUR, Nov 13 (Bernama) -- Production of Proton cars is expected to be at three fold of the present economies of scale by 2015, the Lower House of Parliament was told Thursday.

This followed Proton's continuous efforts to remain competitive in the
foreign market such as with China, Middle East and Asean countries, said Deputy
Finance Minister Ahmad Husni Hanadzlah.

Proton was currently operating at "break even" level -- producing 150,000
cars when it should be rightfully manufacturing 250,000 units at the present
economic position, he said.

"With its current focus on foreign markets, Proton expects 40 percent of
its revenue from the export market in 2010 and 60 percent in 2015," he
said.

Besides exports, Proton cars will also be assembled in Middle East
countries
and Iran has agreed to assemble the national cars there, he said when replying
to a supplementary question from Zahrain Mohammed Hashim, an opposition MP
during question time.

Proton is the Malaysian national automobile manufacturer.

Zahrain had asked on Proton's survival in the face of the entry of foreign
models into the local automotive market.

Ahmad Husni said it was no denying that Proton was facing stiff competition
from foreign models brought into the country through Approved Permits (APs),
locally-assembled cars and Perodua models.

"In terms of APs, the competition is not that big. Going by the 2007
statistics, 50,000 APs were approved but only 27,000 were used," he said.

In the 400,000-odd passenger car market, Proton controlled 26 percent or
117,000 cars while Perodua, the second national car, dominated 36 per cent and
and the balance by locally-assembled cars, he said.

Ahmad Husni said Proton was focusing on the development of the national car
for the mass market particularly to meet the requirements of Malaysians.

"Among the salient points are selling the cars at affordable prices;
installing appropriate safety gadgets to meet current needs; and provide comfort
to drivers and passengers.

"The cars are not made with sophisticated technology as luxury cars as it
will make Proton cars expensive," he said when replying to
Abdul Rahman Bakri, another BN MP who wanted to know measures taken by the
government to improve the quality of the national car to be on par with luxury
ones without raising the price.

On the car market, Ahmad Husni said domestic demand increased by 16 percent
this year from last year but in October demand fell by 25 percent.

"This sluggish market phenomenon happens worldwide," he added.