Malaysia's second national carmaker Perodua today said it will launch a new export model in May but called for further state protection as the auto market gradually liberalises under a regional free trade pact.

Perusahaan Otomobil Kedua (Perodua), which began operations in 1995 as a compact car producer, still needs government assistance to grow its brand and build its niche market and capabilities, said chairman Asmat Kamaludin.

The automaker has worked on enhancing quality, widen its economies of scale and upgrade its vendors but much more needs to be done to prepare for further market opening under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta) agreement, he said.

"We are not asking for a longer period than what is necessary but at this point of time, for Perodua, 10 years is still a relatively short time to stand by itself," Asmat was quoted as saying by news agency Bernama at a Perodua conference.

"We are working towards (liberalisation) but we still need more time, a lot more needs to be done," Asmat said.

Japanese mini car maker Daihatsu Motor Co Ltd, which is a subsidiary of Toyota, owns a 51 percent stake in Perodua which produces a range of small and fuel-efficient models.

Perodua executive director Rajan Chitty said a new 1.3 litre car would be launched in May, which would become the company's core export model for the 10-nation Asean region.

The company has invested nearly RM2 billion so far in its operations, and aims to boost production to 250,000 units per year from around 200,000 now as it seeks to become the top compact car manufacturer in the region, he added.

Drop in sales

Last year, Perodua's share of the domestic auto market fell to 30 percent from 35 percent in 2003, while primary national carmaker Proton's share dropped to 44 percent from 48 percent.

Malaysia, one of the region's top passenger car markets, cut import duties to 20 percent on Asean cars on Jan 1 under the Afta agreement. However, it would delay reducing duties to the required level of below five percent until

The Perodua Vendors Association urged the government to keep to its long-term goal of promoting national car projects to spearhead the country's industrialisation despite the advent of the Afta.

This was crucial as more than 350 vendors, which supply components and services to Perodua and Proton, employ over 150,000 people and have invested nearly 15 billion ringgit, said its president Mohamed Seth Abu Bakar.

But Deputy Prime Minister Najib Razak urged national car manufacturers and auto component makers to penetrate foreign markets, boost their competitiveness in terms of quality, cost and delivery, and explore potential areas of cooperation and synergy.