Embattled automaker Proton said today its profits plummeted 39 percent to RM86.51 million in the three months to December.

But the result was at least in the black, after two consecutive quarters of losses at the national carmaker which is struggling to reverse a steady decline in market share as foreign competitors woo Malaysian drivers.

In the three months to December, sales increased slightly to RM2.15 billion from RM2.1 billion.

Proton said that intense competition in both the domestic and export markets are expected to continue to put pressure on its sales and profitability.

However, it said it would continue to focus on retaining its domestic market share while promoting export growth.

"Continuous efforts are also directed at improving quality, enhancing cost competitiveness and introduction of new models to mitigate the impact of higher costs and increasing competition," it said.

Shoddy models

From a national market share of 60 percent in 2002, Proton has seen a decline to 41 percent in 2005.

Former prime minister Mahathir Mohamad, who was responsible for launching Proton in the 1980s, warned recently that the market share could plunge to as low as 10 percent if the government did not step in to better regulate imports.

Proton struggles with a reputation for producing shoddy and unimaginative models, and as the government whittles away protection, foreign imports have become even more attractive.

However, the carmarker has been given a new lease of life with a recent tie-up with Japan's Mitsubishi, which is aimed at helping it roll out much-needed new models.