Troubled national auto firm Proton expects to reverse its fortunes and return to profit in the current financial year driven by strong sales of a new car to be launched next month.

Managing director Syed Zainal Abidin said the new 1.6 litre sedan will be priced from RM44,000 to RM55,000 ringgit.

"This car will make a difference. We will be back in the black despite a tough first quarter," Syed Zainal was quoted saying by state news agency Bernama to day.

"Our journey (towards profitability) will start when the sedan is launched on August 13," he said.

Proton reported larger than expected net losses of RM591 million for the year to March 2007 due to sliding car sales and higher production costs.

Syed Zainal attributed the losses to "legacy issue rather than operational losses."

He also said Proton's tie-up with China's carmaker Jinhua Youngman Automobile Group will generate several billion ringgit in revenue over the next six years.

Proton will export 30,000 fully assembled of its Gen.2 cars to China, bringing in sales of RM937 million and RM102 million in royalties.

It will also sell 150,000 cars for assembly under a licencing deal based on Proton's Campro engine.

No longer biggest-selling automaker

On the Malaysian government's efforts to find a strategic foreign partner for Proton, Syed Zainal said the company was not "sitting down ... and waiting for a saviour.

"We have done quite a lot of work ... A strategic alliance partner would only serve to enhance our development programmes by way of accessibility to more products, components, technology, improvements and hopefully more markets," he said.

The government is currently in discussions with Volkwagen AG for a possible strategic alliance between the German auto firm and Proton.

Separately, Second Finance Minister Nor Mohamed Yakcop on Friday said efforts to revive Proton will yield results.

"I am not saying that Proton can be profitable in one year but we are confident that there will be some progress within a year," he told reporters.

Proton last year lost its status as the country's biggest-selling automaker to homegrown rival Perodua.

Motor industry data this week revealed that Proton's market share during the first half year shrank to 21.3 percent from 24 percent in the same period in 2006 while Perodua's rose to 34.2 percent from 31.7 percent.