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When Dr Mahathir arrived in China to begin his official visit in 1985, China produced a mere 5,200 passenger vehicles, mostly knock-offs of American and Soviet models. Their main VIP limousine, for example, the ‘Hongqi’ (Red Flag) was based on a 1955 Chrysler Imperial model.

In any case, cars were a rarity then; rush hour was simply a mindless mass of bicycles going helter-skelter in every direction.

Proton in Beijing

The first model of Proton, which had been rolled out only a few months earlier, was shipped to China in time for Mahathir’s visit. While there were hopes that we would, in time, penetrate the huge China market, a key objective of the exercise was actually to convince Malaysian Chinese to support the national car project. It was felt that if China embraced the Proton, perhaps more Malaysian Chinese would too.

Proton was a huge crowd puller in Beijing. Everywhere it was displayed, it drew admiring crowds amazed that a small third world country like Malaysia could produce its own car. It was a proud moment, never mind that the first Proton model was a rebranded 1983 Mitsubishi Lancer Fiore sedan.

Beijing in Proton

Fast forward to 2018 and Proton is now merged with a Chinese automobile maker – Zhejiang Geely Holdings –  which, incidentally, began in 1986 as a refrigerator manufacturer with money borrowed from family members. Today, Geely is one of the world’s largest auto makers with an output of 1.24 million units last year. In 2010, it took over the mighty Volvo and now owns the London Taxi Company as well as a stake in Lotus.

In Malaysia, meanwhile, despite investing some RM360 billion (much of it from public coffers) into the Proton project and protecting it from competition (resulting in higher car prices for consumers), the company failed to take off. It couldn’t even hold its own at home and remained dependent on government support to survive. In the end it was taken over by a company that didn’t even exist in 1985!

Like many Malaysians, I did my patriotic duty to support Proton, owning three Protons over the years. I even drove a Proton Wira when I lived in Chile. It was not Malaysians who failed Proton; it was Proton that failed Malaysians.

National in name

Geely’s takeover of Proton now marks the end of the quest for a “national” car although it was never very much “Malaysian” to begin with. The current Proton Perdana, for example, is a phased-out model of the Honda Accord which was simply “badge-engineered.” What is there to be proud about that?

Even now the grand delusion continues with announcements about setting up a Proton-Geely joint venture that will pave the way for Proton to assemble and market its cars in China. Who are we kidding?

Of course, we all wish the Geely-Proton venture well, especially since so much of our money has gone into it. However, the sooner we stop seeing Proton in nationalistic terms, the sooner we can deal rationally with it.

Yet another national car project?

Despite the Proton fiasco, we now appear to be mulling the idea of yet another national car project, with some economists suggesting that perhaps we should try building electric cars instead. Have we learned nothing from the past?

China is already a world leader in the production of electric vehicles, churning out 680,000 all-electric cars, buses and trucks last year, more than the rest of the world combined. What chance do we have of competing with them?

It is also a hugely expensive business to get into. Global investments in the electric vehicle industry already top RM400 billion. Where on earth will a country like Malaysia with RM1 trillion in debt ever find the money to invest in an electric car project?

Finance Minister Lim Guan Eng’s pledge that public funds will not be utilized to build another national car is, I suppose, a polite way of rejecting the idea since there are simply no Malaysian entrepreneurs rich enough or naïve enough to invest in another automobile project.  Whether he can resist the pressure to keep public funds out of another national car project, however, is yet to be seen.

Time to move on

It’s time to learn from our mistakes and move on. It’s not a choice between being paddy planters and fishermen or car manufacturers. There are other ways to spur our industrialization and grow our economy. Many other developed economies – Singapore, for example – managed to advance without an indigenous auto-manufacturing capacity.

One thing is certain though: Malaysian taxpayers are in no mood to continue chasing after the illusive dream of another national car, especially at this time when we are already beset with major economic challenges.

[Dennis Ignatius | Kuala Lumpur | 19th September 2018]

[Next: Divided we stand]