Malaysia's national carmaker Proton has moved to raise the standards of more than 200 auto part vendors as part of efforts to improve the quality of its vehicles as it seeks to compete globally, reports said today.

"There will be no compromise on quality. This is an area that has repeatedly hurt the Proton brand badly despite our best efforts to produce good quality, reliable and dependable cars," chief executive Mahaleel Ariff was quoted as saying by The Star newspaper.

He said an independent audit based on German standards showed that out of 185 local vendors assessed, only four achieved the top A grade, 13 were rated A/B, 134 were B grade and 34 at C which does not meet required global standards.

Of the 24 foreign vendors audited, 18 were graded A and six A/B.

He said Proton would drop the 34 Grade C vendors as suppliers for its new cars but they will continue to supply parts to existing models. All suppliers will be given up to six months to upgrade their facilities and services to enable them to rise to a higher category, he said.

"This measure is part of our strategy to develop knowledge workers and go hi-tech such as the Tanjung Malim plant which is more about managing robots and machines rather than managing workers," Mahaleel was quoted as saying by the New Straits Times.

The hi-tech factory in Tanjung Malim north of Kuala Lumpur began production early last year and currently manufactures Proton's latest GEN-2 model.

Two new smaller cars are expected to be put on the road this year. Auto analysts said a sports car and a multi-purpose vehicle were also in the offing.

Proton uses a total of 287 suppliers and some 3,000 sub-vendors who supply more than 80 percent of its car components.

Sales are suffering

Mahaleel said Proton's global workforce had doubled over the past nine years to about 11,000 now. It plans to recruit up to 500 design, electrical and mechanical engineers as it shifts focus from purely production to car and engine design.

Proton's sales are suffering amid stiff competition from foreign auto giants as the Malaysian market gradually opens up under a regional free trade pact.

Proton used to sell six out of every 10 new cars in the country but its market share fell to 44 percent last year from 48 percent in 2003.

Exports now account for less than five percent of Proton's earnings but the carmaker is aggressively moving to expand its markets.