National carmaker Proton will begin manufacturing at its Indonesian plant later this month, officials said on Wednesday at the launch of the new "Savvy" model which is destined for export to Singapore, Australia and Britain.

Proton chairman Azlan Hashim said the Indonesian plant would begin operations in June and assemble an initial 8,000 units annually of both the Wira and GEN.2 models.

The company's chief executive Mahaleel Ariff said Proton would make 2,000 Savvy cars a month from June, and that another two new models would be launched in the current financial year to March 2006.

The five-door compact hatchback, which marks the automaker's return to the competitive small-car sector, is priced at about RM40,000.

"We wanted a small car that offers fuel economy, general space and all-round performance," Mahaleel said.

Another official said on condition of anonymity that Proton expects to export the Savvy to Singapore next month and to Australia and Britain by the end of the year.

Proton has the capacity to produce up to 50,000 units of the Savvy each year, he added.

The national carmaker is reaching out to export markets in a bid to counteract tough competition at home, where it faces a new deregulated environment and a flood of competitively priced imports.

Former premier Dr Mahathir Mohamad, an adviser to Proton, said Wednesday that the firm was being hurt by foreign models which were being sold at unfairly low prices in the local market.