Dr M on why he quit Proton

By THE STAR | 6 April 2016

PETALING JAYA: Tun Dr Mahathir Mohamad says he resigned as Proton chairman, that he was not expelled, as the company "seems to be having difficulties with the Government."

"I was not expelled by the Proton management or owners. I decided on my own, for the sake of Proton I should leave. I therefore have no grudge against Proton nor do I want it to fail after I left.

"This is because Proton seems to be having difficulties with the Government and for some unknown reason sales of Proton cars have plummeted.

"I know I am persona non grata with the Government. I do not want to be the cause of Proton’s inability to recover because of my presence," the former prime minister said in his chedet.com.

Dr Mahathir said that previously the government's policy was to encourage local content and that all cars manufactured or assembled in Malaysia were entitled to rebates on excess duty based on the percentage of local contents used.

"Most foreign cars assembled in Malaysia has 30 – 40% local contents. Proton has almost 90% local content. Therefore, the rebate for Proton is higher. It is not a privilege for Proton alone.

"All foreign and local cars enjoy this privilege. Local contents increase the cost of producing the car. This is because the deletion allowance by the foreign company is invariably lower than the cost of the local component,” he said.

Dr Mahathir said Proton has contributed more in funds to the government than the other way round.

“The Government claims to have provided grants, various forms of assistance as well as tax foregone to the take of about RM13.9bil in total. Most of this is made up of taxes foregone,” he said.

He added that Proton provides jobs for about 12,000 workers at any one time directly, and more than 250,000 souls indirectly.

“Proton reduced the outflow of funds probably amounting to more than RM100bil,” he said adding that vendors also created jobs and reduce outflow of funds.

He lemented that Malaysia can forget the development of engineering capability as the policy now was to encourage imports.

“Incidentally all the countries exporting cars to Malaysia implement tariff and non-tariff barriers resulting in excluding Proton importation into their countries. This contrast with our policy of allowing foreign cars to enter Malaysia with minimal or no restrictions,” he said.

He added that Proton has had to compete at home against the likes of Toyota, South Korean car makers, German car makers and others.

He said that these companies could afford to lose on their cars in Malaysia and recoup in other markets.

“Today the Government has no pride in national products. Imports are cheap and there are more consumers than producers. In democracy numbers count. So pleasing the more numerous is more important than national capacity of develop,” he said.