Struggling national carmaker Proton should step up its search for a foreign partner, International Trade and Industry Minister Rafidah Aziz said in remarks published today.

"We have lost a lot of time with Proton not being at all responsive to getting foreign partners in the past, even though the cabinet had decided some years back that Proton should seriously look at this," she told the New Straits Times in an interview.

The foreign partner should be a major player who had access to the latest technology and could provide significant market access for Proton to expand and compete in the regional and global markets, Rafidah said.

Proton need not have a majority stake in the partnership as long as the alliance could benefit the domestic car industry, she said.

The company may have achieved leadership in the domestic market, but it was still not able to show similar success in the region or globally, she added.

"There's no way out of having strategic alliances. It's happening everywhere in the world. (And) you cannot have strategic linkages with some unknown company that has very little credibility. You must link up with the giants," Rafidah said.

Suppliers affected

She added local suppliers to Proton had lost out in terms of development due to Proton's delay in linking up with international carmakers which have also wanted to source from Malaysia.

Some Proton suppliers had started to find their own export markets after realising that supplying to Proton alone was going to be less viable in the future, she said.

State investment arm Khazanah Nasional, the single largest shareholder, is reportedly considering plans to allow a foreign carmaker to hold up to 20 percent equity in Proton to boost its competitiveness and improve sales eroded by foreign rivals.

The move follows the withdrawal of its Japanese partner Mitsubishi after two decades and the recent appointment of former premier Dr Mahathir Mohamad, who created Proton in 1983 as part of Malaysia's drive into heavy industry, as adviser.

Mitsubishi Motors recently bailed out but trading house Mitsubishi Corp. still holds another 7.9 percent in Proton and is believed to be in talks to sell it to Khazanah.

Proton used to sell six out of 10 new cars in the country but for the first time in years, its market share shrank to 49 percent in 2003, from 60 percent in 2002, as sales tumbled 27.5 percent to 155,420 units. - AFP