8/13/2019 | 1 MINUTE READ

Malaysia Rekindles Plan for Domestic Carmaker

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Malaysia again hopes to establish a new national car brand, this time through a partnership with Toyota’s Daihatsu Motor Co. unit.

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Malaysia again hopes to establish a new national car brand, this time through a partnership with Toyota’s Daihatsu Motor Co. unit.

The scheme is backed by Prime Minister Mahathir Mohamad and involves a collaboration between Daihatsu and Malaysian engineering services provider DreamEdge. The government will aid with licensing but doesn’t intend to make an investment in the venture.

The duo aims to launch production of a hybrid or piston-powered sedan a short two years from now.

Mahathir announced the project last year, shortly after being voted back into power. As deputy prime minister in 1983, he championed a similar venture through a partnership between Malaysia’s Proton Holdings and Japan’s Mitsubishi Motors. The partners produced variants of Mitsubishi sedans in Malaysia.

By the early 1990s, Proton controlled 75% of the heavily protected domestic market. But its market share plummeted as the company introduced poorly designed domestic models as lower tariffs allowed a flood of better-made Japanese imports.

Proton’s market share shrank to less than 25% by the early 2000s. In 2016, the Malaysian government agreed to back a 1.5 billion ringgit ($358 million) bailout, stipulating that Proton produce a sustainable business plan and find a foreign partner.

In 2017, China’s Zhejiang Geely Holding Group acquired 49% of Proton.