Malaysia's struggling national automaker Proton unveiled a new model yesterday to reverse declining sales as Prime Minister Abdullah Ahmad Badawi warned of stiff competition in the global auto industry.

The launch of the three-door hatchback Satria Neo saw Abdullah seated behind the wheel of a red model examining its interior at Proton's flagship service centre south of Kuala Lumpur.

The Satria Neo, bound for domestic and export markets, is the successor to the 1994 Satria model and is powered by Proton CAMPRO engines in 1.3 and 1.6 litre versions, said the company.

Managing director Syed Zainal Abidin Syed Mohamed Tahir said Proton expected to sell 14,000 to 15,000 units by December, but that the Satria Neo alone would not reverse the company's fortunes.

"I hope to increase our market share, which has been declining (but) Satria Neo alone is not going to pull Proton into profitability," he told reporters, adding the company had other models and initiatives up its sleeve.

'Failure not an option'

While Abdullah lauded the model, he called on Proton to focus on opening new markets and forging strategic partnerships in the face of increasing global competition.

"Success is your only choice, failure is not an option," Abdullah told Proton staff in a speech.

"It is important that we can prove that Proton can continue to be a car company that is the pride of the nation," he added.

He said the country's auto industry was shifting into a "highly competitive phase" with several obstacles in store.

"These include industry consolidation, trade liberalisation, and growing fears of slower demand for cars given the high price of oil," he said.

Proton saw a dismal end to its financial year on May 30, posting profits of RM47.0 million (US$13 million), just one tenth of the earnings recorded in the previous year.

The company has admitted intense competition in domestic and export markets has put pressure on sales and profitability and has said it would launch six new models over two years to arrest declining 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.