PM: Why we need a national car project

In building cars, Malaysia will acquire engineering capacity in other diverse areas and systems


Malaysians are more concerned with buying cheap and imported cars than building engineering capacity and turning the country into an exporting nation, said Tun Dr Mahathir Mohamad.

The prime minister (PM) said a mindset that says “I want to buy a cheap, foreign car and I don’t care what happens to the country” would have prevented countries like Japan and South Korea from producing their own cars, creating a vibrant automotive sector and expanding their engineering capacity into other sectors.

Dr Mahathir was speaking about the new national car project that he has mooted since taking over as PM in May.

He said this proposed car project is misunderstood by many, and that it will be more than just about national pride, despite the fact that only a few developed nations in the world have their own car industries.

“I mean, Malaysians, what do they think? Just buying cars? Is that all they are going to do…to become a good consumer? You must remember that if you don’t have industries, you will very soon cease to become good consumers because you don’t have the money.

“The idea is to build up Malaysian engineering capability, so that we would be making money for ourselves by exporting our products. When you import, you are exporting your money and if you keep exporting your money, you will become poor. This is very simple thinking,” said Dr Mahathir in an exclusive interview with The Malaysian Reserve.

He said many have failed to understand the objective behind the national car project.

“It is not just about building a car. It is about engineering. A developed nation must have good engineering capability. The car will help us acquire good engineering capabilities, not just for making the car, but for other engineering things,” said Dr Mahathir.

He said in building cars, Malaysia will acquire engineering capacity in other diverse areas and systems.

“Those things can be used for other products. So if you build a car, you are forced to go with the engineering and you acquire the engineering knowledge,” he said.

Dr Mahathir, who initiated the first national car project Proton when he first became PM in 1981, had proposed for the development of another national vehicle after he was appointed as the PM for the second time in May.

His proposal, however, has been widely criticised by many sections of the public, including members in his Pakatan Harapan coalition. Critics have voiced their concerns over the need of such a project, the investment required and the market for such a vehicle.

Many critics had pointed to Proton Holdings Bhd’s past failures and when prices of other cars had to be increased due to protectionism of the national car. Finance Minister Lim Guan Eng had said the national car project will be a private sector-driven initiative and no government funds will be injected.

Details of Dr Mahathir’s next national car project remain sketchy, but reports said it could be an Asean initiative with international partners. Electric cars or hybrids have been proposed for the multibillion investment project.

A source close to the government said interests from foreign companies to partner Malaysia on the initiative have been sound.

During his visit to Jakarta in June, Dr Mahathir and Indonesia President Joko Widodo agreed in principle to explore a joint Indonesia-Malaysia car project. A similar venture was mooted by Dr Mahathir in 2015, but the project failed to take off after he was removed from Proton.

Indonesia is South-East Asia’s largest car market, selling about 1.1 million units — double the size of Malaysia’s total vehicles sales of around 590,000 units this year. The region is becoming a lucrative car market with 3.36 million vehicles sold last year as it experiences an economic boom and rising wealth among its 600 million population.

Vietnam had said it is exploring the possibility of producing its own car. Dr Mahathir, in the interview, said some of the country’s “intellects” have failed to see the thinking behind the national car project. He gave the example of SKF, a Swedish company that manufactures and supplies ball bearings.

“They just produce ball bearings. It is so important that worldwide, they supply that kind of thing. So, when we have engineering knowledge, you go into other industries which by themselves, can become very big.

“Of course, if they are good, they can become big businesses by themselves,” he said.

Dr Mahathir said the fact that Malaysia could produce a car is something that the nation can be proud of.

“We have a car that was manufactured in 1985 which is still running on the road. We must have acquired some engineering knowledge.

“When you do away with it, then you are throwing away one segment of the economy of a developed country. A very important segment,” he said.

Dr Mahathir highlighted that Japan and Korea also impose non-tariff barriers for other car makes to enter their markets.

“If you go to Japan, you hardly see any foreign-made (cars). You go to Korea, you will hardly see any foreign-made (cars). In China, there are foreign-made (cars), but they all have to be manufactured in China because the Chinese want to acquire engineering capability,” he said.

“We are not a developing country so much now. We are well on the way to become developed, but the mindset is not developed,” he said.

He also took a swipe at some of his critics. “Sometimes, strangely, highly qualified people say this. They are economists. They ought to know that the duty of the government is to see the development of the country, not to see your personal choice of car.”