PROTON and Lotus should produce their own engines for the national car to reduce cost as a result of high royalty paid to Mitsubishi, said International Trade and Industry Ministry parliamentary secretary Datuk Fu Ah Kiow.
He said Proton should also produce its own car components to remain competitive after the Asean Free Trade Area (Afta).
“Proton must buck up. It buys a lot of components,” he told reporters at the lobby yesterday.
Earlier, when replying to Mohd Apandi Mohamad (PAS – Jeli), Fu said export of the national car was expected to increase with the production of new completely knocked down (CKD) Proton models for export by the end of the year.
“One of the factors affecting the market is that Proton exports the old Wira model which has to compete with newer models from countries like Japan.”
He said the export of Proton cars last year decreased to 8,209 units compared with 8,838 units in 2001, 14,598 units in 2000 and 14,052 units in 1999.
Proton’s main export destinations are Britain, Australia and Iraq.
He said his ministry and the Finance Ministry were in the final stage of discussion about reducing the duty on imported cars. By 2005, the duty on imported cars is expected to be reduced to 20%.
“Miti and the Finance Ministry will decide the amount of duty to be reduced for imported cars.
“It will also decide on how much excise duty to impose so that Proton will be able to compete with imported cars on a level playing field.”
Currently, duty imposed on imported cars is between 140% and 300% for complete build up (CBU) cars and between 42% and 80% for CKD cars.
Excise duty imposed on locally made and assembled cars is between 30% and 50%.