But now Proton has basically acknowledged that it will have to compete against the major global auto players like Toyota and Ford, and the company is openly trying to target a tie-up with one of them. Proton does have its attractions. It has the only design-engineering facility among Asean nations. It recently unveiled its first engine, created by subsidiary Group Lotus in Britain, and it has just started production of its first, largely locally designed sedan, the Waja. Despite the globalization of the car industry, models aimed simultaneously at all major markets have not succeeded.
Different regions expect different specifications, mostly predicated on size.
At the launch of its Waja model in September, Proton Chief Executive Mahaleel Ariff said the two-year extension on protecting its markets would be used to focus on its independent engineering and design skills. It will use the engine not only in the Waja but also for export to other countries in the region. But it will not have the same advantage over Japan's Honda Motors, which should start new joint-venture production in Malaysia next year, and have its vehicles on far lower tariff levels than imports. And that will only be a shadow of the competition Proton will face from 2005 when cheaper Toyotas and Fords from Thailand roll in. The most important thing for Proton is to reach an economy of scale and properly penetrate developed markets.