Proton to roll out own engines next April

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National carmaker Proton will roll out its own engines next April, saving some RM200 million in royalty payments, an official said today.

The Campro engine was being jointly developed with Proton's British unit Lotus Group, trade ministry parliamentary secretary Fu Ah Kiow was quoted as saying by Bernama news agency.

Fu told parliament many countries had expressed interest in the Campro engines, which reflected Proton's success in research and development. No other details were available.

Proton is pinning hopes on the Campro engine to boost competitiveness to prepare for market liberalisation in 2005 under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta).

Proton's chief executive Mahaleel Ariff has said the new engine would cut production costs by 20 percent and save the company some one billion ringgit over the next five years.

Proton, which has owned 80 percent of Lotus since 1997, was also developing a common chassis with its British unit to further lower production costs, he said.

More than 65 percent of cars sold in Malaysia are Proton, partly because of high tariffs on imported cars but its tariff protection will largely disappear by 2005 under Afta.

Tariffs on auto products in Asean will fall to between zero and five percent by 2003 but Malaysia has been allowed to delay tariff cuts until 2005.

Prime Minister Dr Mahathir Mohamad has told Proton to cut its production costs to stay competitive ahead of tariff cuts and said the government was prepared to authorise the sale of up to 30 percent of Proton. AFP



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