Malaysia believes that a strong motor industry brings employment, technology and prestige. Nine vehicle assembly companies produce 18 cars and 14 commercial vehicles, but the market is dominated by Proton and Perodua, Malaysia's National Car companies. In 1985, the Malaysian government formed Proton, in conjunction with Mitsubishi, to assemble its first national car. There are now 5 models being produced under the Proton name. In October 1996, Proton acquired Lotus, and plans to integrate specific models into its national car program.
Protons typically sell for half the price of import equivalents.
This program is likely the replacement of a third national car program which was considered during 1994 and would have involved Citroen. This van will reportedly be exempt from import duties on CKD components and will receive a reduction of 50 percent on the excise tax, resulting in a potential 20-30 percent price differential with other products in this niche. It is unclear whether this is a 5 or 10 percent quota. Malaysia maintains an import ban on motor vehicles from Israel and South Africa . Malaysia has not defined its policy commitment to eliminate mandatory parts and local content requirements as part of the WTO TRIMs Agreement.