A thorough study needs to be carried out to determine whether a new national car project, as announced by Prime Minister Dr Mahathir Mohamad today, is feasible amid the current environment, according to industry observers.

"We are hoping that a very thorough study is done to make sure that, if Mahathir decides to have a (new) national car, then it is the right thing for the nation," said the Malaysian Automotive Association president Aishah Ahmad today.

She was asked to comment on the prime minister's remark that Malaysia planned to have a new national car, which would be able to access world markets, at the 24th Nikkei Conference on the Future of Asia held in Tokyo today.

Mahathir had reiterated that Proton, which he launched in 1985, was now owned by China’s Zhejiang Geely Holding Group and therefore no longer considered a national car.

The new car project, he said, would be carried out with Asian partners, possibly China, South Korea, Thailand and Japan, as these countries were able to produce quality and marketable cars.

For Aishah, protectionism accorded to a national car is not good for the industry because it does not create a level playing field.

"When they first started, they gave a lot of incentives for the national car. Non-national cars had to pay high duties and all that. The whole world now is making sure that there are free trade and a level playing field," she said.

Meanwhile, Universiti Teknologi Malaysia geostrategist associate prof Dr Azmi Hassan said the new national car project would encounter stiff competition in terms of offering a lower price even if it had a strong strategic partner.

He added that there was concern whether Malaysia, given the current situation, was capable of launching a project of such magnitude as the expenditure would be mammoth.

“The government needs to be cautious in starting such a project, as we do not want it to experience the same fate that has befallen Proton. I am sure Mahathir's ambition will be supported by studies.

"The project will not take place in a year or two because what is most important is to get the right partner so that the terms will benefit both parties," said Azmi.

- Bernama