National carmaker Proton ended a dismal financial year today by posting profits of RM47 million, just one tenth of the earnings recorded in the previous year.

Proton said the result, which compared to RM442.4 million in the previous financial year, was due to lower sales, more expensive components and higher allowances for doubtful debts and promotion costs.

"Intense competition in both domestic and export markets are expected to continue to put pressure on Proton's sales and profitability," said managing director Syed Zainal Abidin Syed Mohamed Tahir.

Syed Zainal said Proton plans to rejuvenate its range by launching six new models over two years that he expects "will arrest our declining sales".

He said the carmaker is also pursuing several alliances with foreign manufacturers, including PSA Peugeot-Citroen, Mitsubishi and two Chinese automakers.

Talks with PSA are at the "quite detailed" level and Proton hopes to ink an agreement soon," he said.

"This is a discussion that is ongoing today on how the commitment can be best cemented going forward," he said.

Dwindling market share

PSA Peugeot-Citroen earlier this month denied press reports that it was preparing a joint project with Proton, saying that although talks had been held in the past there were no current plans for cooperation.

Proton has been seeking foreign partners to help it survive in the face of competition from foreign automakers as well as more nimble Malaysian producers who are beginning to outstrip it in sales.

Proton's market share has fallen steadily in recent years due to the whittling away of import duties and a persistent reputation for poor quality and unimaginative models.

Its revenue in the year to March totalled RM7.8 billion compared to RM8.5 billion previously while pre-tax profit totalled RM28.2 million against RM412.3 million previously.

Syed Zainal said Proton will have its margins squeezed due to higher oil prices and electricity tariffs.