The Proton Problem – Protectionism does not Protect

Since its founding by Tun Mahathir Mohamad in 1983, the name Proton goes hand in hand with the word ‘protectionism’. Well it did help boost national pride 20 years ago, Proton is now seen as a symbol of substandard quality rather than a decent passenger vehicle.

Proton Wira (which is still at large in the market) is based on the design of the fifth generation Mitsubishi Lancer way back in 1991 (that is almost 17 years ago!). Worst still is the fact that the car has still many faulty defects that have not been properly addressed (throttle body, brake system, water coming into my car problem).

Protectionist government policy have long gave Proton a competitive edge over foreign cars. Duties on packages of parts for assembly into complete cars in Malaysia is said to average about 150% (not to mention other forms of exemptions from Excise Duty to tax rebates).

While all these aspects proved advantageous to the local car maker, Proton do not seem to be able to catch up with foreign car makers. Instead, protectionist policies has enabled Proton to continue to sell outdated designs, with scary outdated safety features.

Worst still is the mismanagement that continues to haunt the company and eat into their profit margins and market share. Proton’s purchase of a majority share in MV Augusta of Italy at 70 million Euro in 2004 and its subsequent sale for 1 Euro caused an uproar in many citizens of Malaysia. Recently, Proton Savvy was recalled back from the market due to a glitch in its rear wheel.

As Proton has recently been replaced by Perodua as the country’s largest passenger carmaker, one can see that protectionsim (though initially intended to be helpful) do not protect. The result of the government’s policy is that many Malaysians (me included) are driving vehicles of substandard quality.

If you do not believe me, take a trip to Beijing and catch a ride in their Volkswagen taxis.

Comments
2 Responses to “The Proton Problem – Protectionism does not Protect”
  1. KenStar says:

    Hmm.. When you say take a ride in a Volkswagen taxi in Beijing, does that mean the taxis are better or the same as the Protons? But I have to say, Volkswagen do make better quality cars though..

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