National car manufacturer Perusahaan Otomobil Nasional's (Proton) failure to introduce new models has resulted in its international sales to decline drastically - with o­nly 8,209 cars exported last year.

International Trade and Industry Ministry parliamentary secretary Fu Ah Kiow told the Dewan Rakyat today that 14,052 cars were exported in 1999 and the following year 14,598 cars were shipped out.

He said the downward trend began in 2001 when Proton o­nly managed to export 8,838 cars due to "the failure by the manufacturer in introducing new models."

"On the other hand, other manufacturers have come up with newer models from time to time," he added in response to a question from Mohd Apandi Mohamad (PAS-Jeli)

"For example, the existing Proton Wira model is already obsolete for the export market", he pointed out.

The model was launched in 1993. The company released its first model - Proton Saga - in 1985 and has unveiled several other models over the past few years such as the Satria, Iswara, Perdana and Juara.

Its latest model - Proton Arena - was introduced last year. However, its two most popular models are the Wira and Waja - introduced two years ago.

Proton cars are exported to 50 countries including the highly competitive United Kingdom and European markets. Other markets include Australia and the Middle East.

Reducing production costs

Meanwhile, Fu said Proton will introduce its own engines for its cars from this year. At present, the engines are based o­n the technology of Japanese car manufacturer Mitsubishi Motors Corporation.

"The new engine, called Campro, will combine local and Lotus engineering technology and this will reduce the production costs by at least 10 percent. At present Proton is paying royalty to Mitsubishi, which attributes to the high cost of the car," he added.

In 1996, Proton acquired the British automotive engineering company Lotus Group International Limited with the intention to upgrade its engineering capabilities.

Earlier Mohd Apandi said Proton's lower export figures was a matter of concern as it reflected the consumer's true response to the cars.

"So far Proton has managed to survive due to various strategies used to attract customers, especially locals, but this will not be the case when Afta comes into effect in 2005" said the opposition MP.

In 2005, the government would be compelled to lower excessive protectionist taxes o­n imported cars under its commitment to the Asean Free Trade Area (Afta) agreement.

This has lead to a frenzied anticipation by local consumers that foreign cars would be cheaper, at the same time prompting fears that Proton would not be able to withstand the competition.

Level grounds

However Prime Minister Dr Mahathir Mohamad had said that taxes would be maintained equally for both foreign and local national car companies like Proton and Perodua, effectively resulting in national cars becoming more expensive by 2005.

Responding to a question this morning whether Proton would remain competitive after 2005, Fu said the company would be "competing o­n a level playing field."

The parliamentary secretary added that at present locally manufactured cars are subjected to 30 to 50 percent of excise duties. The excise duties are also applicable to imported cars that are locally assembled, ranging from 42 to 80 percent.

For completely build up (CBU) units - fully assembled cars that are imported - the import duty ranges from 140 to 300 percent.

"This high import duty was introduced to protect local cars but the government is looking into reducing this figures by 2005," added Fu.