PETALING JAYA: A think tank has urged the government to review preferential policies like the one that shields Proton from competition.
In an interview with FMT, Asian Strategy and Leadership Institute (Asli) chief operating officer Ng Yeen Seen said the national carmaker had not done justice to the huge amounts of public funds spent to support it.
In fact, she added, the protectionist policy in Proton’s’ favour could be the very reason it had been unable to compete with other carmakers.
She said all protectionist policies must have a sunset clause and be subject to periodical reviews.
Import duty and local taxes slapped on foreign cars can result in buyers paying up to 145% in taxes for completely built up foreign cars and up to 125% for completely knocked down imports.
Tax breaks are just one aspect of protection for Proton. The RM14 billion the government has pumped into the company since 1983 included grants and other forms of assistance, according to a recent report.
Ng said: “How far has Proton come compared with other carmakers?
“Despite the high prices of Japanese and Korean cars —which are inexpensive outside Malaysia — many Malaysians are still willing to buy them here.
“The only way forward for organisations and even individuals to be competitive is to allow them opportunities to learn and stand on their own feet. It’s not right for any industry or organisation to wait for the government to bail it out every time it gets into trouble. Everyone must learn to fend for himself.”
According to data from the Malaysian Automotive Association for the first 11 months of 2016, Perodua owned 39.93% of the market share, ahead of Japanese car maker Honda (17.58%) and Proton (14.2%).
In 2001, Proton’s market share stood at 53%.
Referring to race-based policies, Ng said these too should be relaxed progressively.
She acknowledged that the New Economic Policy (NEP) had succeeded in creating a Malay middle class and reducing poverty.
“The NEP managed to reduce poverty from 74% in 1970 to the current 6%,” she said. “Although critics of the policy say that only some privileged groups benefited from the NEP, it can’t be said that it hasn’t succeeded in reducing poverty.”
She noted that the government had, over the years, relaxed quotas across industries. However, she added, many remained in force and needed to be reviewed.