Wednesday, July 20, 2005

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Mahathir Mohamad's grumpy retirement

There appears to be a rift brewing between former Malaysian PM Mahathir Mohamad and his successor, current Malaysian PM Abdullah Badawi.

After reading this excerpt from John Burton's story in the Financial Times, see if you can guess which one I hope prevails:

The future of Proton, Malaysia's national carmaker, appears to have caused a schism in the government, with the issue pitting Abdullah Badawi, the prime minister, against his predecessor, Mahathir Mohamad.

Dr Mahathir, who has championed Proton's cause, has claimed that a system of import licences for foreign cars has damaged Proton sales and demanded that those who have received the privileged licences should be revealed.

Mr Abdullah, who has favoured reducing trade barriers protecting Proton, this week named the licence holders, which have long been secret, in a move to promote government transparency ahead of the ruling party's annual meeting.

The prime minister's disclosure is seen as calling his predecessor's bluff to embarrass him. Among those holding the approved permits was Mokhzani Mahathir, Dr Mahathir's son, who was allowd to import 95 Saab and Porsche cars....

High tariffs have protected Proton until recently. But aggressive sales tactics by Toyota and Hyundai among others have reduced Proton's domestic market share from 70 per cent to 45 per cent in the last five years. Malaysia is south-east Asia's largest passenger car market.

Doubts about the survival of Proton have increased after Mr Abdullah agreed to nearly eliminate car tariffs by 2008 under south-east Asia's free trade agreement.

Analysts say Proton's best hope for survival is a partnership with a foreign carmaker. Volkswagen last year agreed to produce cars for the regional market at Proton plants in return for providing technical assistance.

But Proton officials have indicated that they would resist VW taking a majority stake in the company.

Since stepping down as prime minister in 2003, Dr Mahathir has become a key defender of Proton in his role as the company's special adviser.

posted by Dan on 07.20.05 at 12:49 PM


An interesting story, considering that Proton's early models were knockoffs of Japanese (Mitsubishi, as I recall) designs, and Japanese investment helped get the make off the ground in the first place.

posted by: Zathras on 07.20.05 at 12:49 PM [permalink]

They deserve government protection for that cool name alone.

posted by: Don Mynack on 07.20.05 at 12:49 PM [permalink]

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