National carmaker Proton said today it will get a boost when its new RM1.8 billion manufacturing plant begins operations at year-end.

Perusahaan Otomobil Nasional Bhd. (Proton) chief executive Mahaleel Ariff said the state-of-the-art plant in Tanjung Malim in Perak was equipped with new technology to boost efficiency and quality.

Located o­n a 512 hectare site, which is almost five times the area of its current plant in Selangor, the plant would produce o­nly new Proton models, he was quoted as saying by Bernama news agency.

Mahaleel said the plant was expected to roll out its first car using Proton's own designed Campro engine at the end of the year.

It can produce 150,000 cars a year but capacity could be expanded to reach o­ne million units, he added.

Proton City

Proton has said its current factory in Selangor was congested and the new plant, conceived as the largest in the region, would provide it with an advanced facility to expand production and cut costs.

The plant is located in the three billion-ringgit Proton City, an automotive township project that was revived in 2001 after it was put o­n the backburner following the 1997-1998 Asian financial crisis.

The Proton City, based o­n Detroit in the United States, will also house a test drive circuit, an automotive technology centre and housing estates.

Officials said the township, scheduled for completion by 2020, would allow Proton to raise its annual production to 500,000 units by 2005 and to o­ne million by 2010. Proton now sells less than 200,000 cars a year.

Analysts said the project was conceived for Proton to compete more effectively with bigger, more established carmakers when the domestic car market is liberalised in 2005 under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta).

Mahaleel earlier this month said Proton saw little need to form alliances with foreign automakers to stay competitive and has put in place plans for regional expansion under Afta.

Lotus engineering

Proton expects the Campro engine, jointly developed with its British unit, Lotus Group, to help cut production costs by 20 percent and save the company some o­ne billion ringgit over the next five years.

Proton now has some 60 percent of the Malaysian market due to high tariffs o­n imported cars.

This protection will largely disappear under Afta where tariffs fall to zero to five percent at the start of 2003 but Malaysia has obtained a reprieve for its auto industry until 2005. AFP