Mahathir’s national car policy a big mistake


Khazanah’s sale of its 43 per cent stake in Proton to DRB-Hicom will close an unhappy chapter for the government’s foray into the production of a so-called ‘national car’.

It was a big mistake from the word go. And millions of ringgit have been lost in the process.

First, we did not have the expertise or comparative advantage to produce cars. The anticipated technology transfer did not take place quickly enough.

The opportunity costs have been tremendous:

– the national car policy indirectly promoted the construction of lucrative tolled highways (and in the case of Penang, tolled bridges and tunnels) for concessionaires; ordinary motorists now carry the burden.

– for a long time, public transport was neglected. We could have had fantastic modern rail, LRT and even tram systems. Instead the development of our train services drew to a screeching halt in the 1980s and today, the train service is reminiscent of the 1970s. And there was little incentive to introduce light rail or tram systems in urban areas outside KL nor was there much political will to introduce bus rapid transit (BRT) systems. In Penang, the ferry service was neglected and the terminal that collapsed on the mainland in the late 1980s was never rebuilt.

– the promotion of the national car, along with easy car loans, led to increasing congestion on the roads, as more and more people relied on private motor vehicles.

– the market was protected and higher import duties for other makes and little competition for Proton meant that Malaysians had to pay a much higher price for imported cars.

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– car loans grew to become a significant component of rising household debt.

– the dependence on motor vehicles puts Malaysians at the mercy of higher oil prices.

– the promotion of private motor vehicles is environmentally unsustainable.

– huge investments are needed for road infrastructure, maintenance and widening – money which could have gone into improving our public transport infrastructure and rural transport networks in Sarawak and Sabah.

– hundreds of millions of ringgit have been spent on government subsidies for Proton, investments in Lotus (including Formula One sponsorship), etc.

For all this, one man is principally responsible. The national car policy was after all his pet project. And what a tremendous price we have paid.

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  1. We shall have National Transport Policy instead of National Car Policy. It will comprises all, especially emphasization on public transport and less on those private vehicles. And agricultural industry is what he shall have focus extensively. Because our country have way sooo many resources that is priceless and these resources are being wasted, not taken care of and unutilized. Oh, it is unfortunate. How I wish I can stand up for this at that point of time. I was young and busy playing with the greens surrounding my house which I cannot see anymore now because of those greedy white-collared people produced by Mahathir Mohammad, endless highways, endless parking lots and endless luxurious shopping mall. He left all the mistakes for us to bear. But then, how do we solve this now?

  2. mahathir knows it’s not a mistake for him…it’s only a mistake for us…in fact, he is smart enough for himself to make money for his cronies ….

    • Mahathir, despite his nationalistic rants, signed a secret security agreement with the United States in 1984 that gave the Americans access to a jungle warfare…. Mahathir used … his ruling Umno to turn the party into a vast conglomerate with investments that spanned almost the entire economy…

  3. OK, so the policy was stupid. Why did we not get rid of it during the reign of the emperor? Why did we not dismantle it in the subsequent years? Why was the business not sold to major intrested parties? The answers are all the same: we do not have a democracy, and foolish Malaysians are easily distracted with baubles.

  4. The pattern of Malaysia Boleh is again repeated in the acquisition of QPR and Cardiff. What a waste of money!

    • Tun M tried to tell the malays that they could acquire British assets as a reprisal for being jajah by the British.

      But the British has the last laugh. Funds from Bolehland are channeled to Britain to help the ailing business like Lotus.

      So Tun M has made another big blunder….

  5. It was a good idea in the beginning.
    Korea started theirs about the same time as well.
    Perhaps it was umno’s NEP policies , protectionism and political patronage that made the national car company as a lame automobile maker.Plus a host of silly things that tried to portray it as Islamic automobile and Malay entity.Mahathir was the one who said those.
    Umno’s mistake actually. Those who voted for the bn shares the same responsibility.All common Malaysians suffered as their result.
    And now we have stage bus companies that refuses to run .

  6. Reminds me of why I wanted to puke when he started blogging, and many young folks foolhardily starting gushing “we LURVE you Tun!”.

    But Proton, and the related ill-fated Perwaja steel project and its multi-billion lossses, are but the tip of the ice-berg. many other unsavourary things which had their root in his 22 years at the top.

    Mahathir stands out in my mind for what happened to Salleh Abas and the brave senior judges who stood by Salleh. The sums, undisclosed but probably in the millions, paid out during Abdullah Badawi’s term may soothe the pain of the affected judges somewhat, but aside from some recognition that they had been wronged, Mahathir had got away scot-free.

    Generations of Malaysians have already suffered due to him. And generations to come will still have to pay for what he did to Malaysia, even if Pakatan succeeds in the long-awaited march to Putrajaya, more if Pakatan does not. What a legacy.

  7. I hope the … shenanigan Mahathir gets to read the comments and remarks written about him…
    If a contest is held here for the most hated man in Malaysia I would bet my life that he would win hands down.
    I wonder what has his … (family) got to think of him with so many (negative) comments said of him. Or is he trying to be remembered for ten thousand years for being the shenanigan that he is and not for a thousand years for being a good human being ? So the saying goes ! Also he must have the skin thicker than an armor car…
    Anil this is nothing personal just an expression of the frustrations of one of the millions of Malaysians.

  8. “National car policy a big mistake”


    Yes indeed and a good one from Sobri.

    Just to share this…

    Pg 173…”Economists warned Mahathir from the beginning that the Malaysian market was too … but by 1998, the first of the national car projects, the Proton Saga, …”

    How Asia got rich: Japan, China and … – Edith Terry – Google Books –…ir&f=false

    Next, for M … to prolong his position as Advisor with Petronas, Proton, etc ….

    Another round of “Corporate” Ponzi scheme for the new owners….

    Creative accounting, Negative Gearing, Tax Shelter, etc, etc. whatever…

    At the expense of our Taxed Blood, Sweat and Tears $$$.

    Enough is Enough…

    Power of the People vs People in Power…

    The reverberations of the aam aadmi’s awakening are being felt all over the world – from the right bank of the Nile to the left cheek of Sharad Pawar.

    What is the purpose of our call for ABU ? To reduce Ketuanan UMNO/BN’s majority!

    This should be our focus and objective and not be lured into these Diversions by the Ketuanan UMNO/BN Leaders, Mini Napoleons, Cronies, Machais, etc

    Let us all pass on the message of ABU to make it reverberate into the citizen’s and nation’s battlecry for Rule of Law, Justice, Freedom & Human Rights

    You be the judge.


  9. One reason the govt sold Proton to Syed Mokhtar and not to Volkswagen is that he (may) continue the UMNO gravy train. It is a well known fact that Proton buy parts at inflated prices. One manufacturer told me he (allegedly) sold mats to people in Proton for RM 40 per piece. These people (allegedly) re-sold it to Proton for Rm 160. Multiply this by the parts used in Proton and imagine the the size of the gravy train. Do you think UMNO will let this gravy train run dry?

  10. Dear Readers,

    No one economist at the time the project was mooted gave a green light for our car industry. Malaysia prior to that has been identified as a hub for car assembly and car parts manufacturing (later went to Thailand). There was a lot of hush-hush in the markets and many car franchisee shares started to soar at that moment in time.

    However, from the 7 heaven, this so called brilliant man, and with his enthusiasm and a known chauvinist (refusing to listen to many renown economists & automotive industralists) embarked on an investment with no local known expertise and technical know how, a right recipe for complete failure. Till today, he has the guts to tell us that it is still viable even though Proton is plagued with umpteen problems.

    There are only fact-lifts and make-ups but what is beneath the surface is a junk engine, with outdated technology. Proton is known for high petrol consumption, with no technology to improve the petrol/ liter mileage. Accidents have resulted in complete wrecked of the vehicles and fatal death. The usual blame is speeding but never on the poor technology vehicles.

    The cronies supplying the parts to Proton is to be blamed. The quality is poor and very much sub-standards. They are UMNO’s men and must be taken care off, if UMNO is to survive. Losing some states to the opposition had already reduced the job opportunity for the UMNO’s cronies.

    We, the rakyat has a price to pay and we are paying for a poor quality car at an exorbitant price were told be proud to own Proton. One man’s poor decision has cost all to suffer. He will live to see all the poor happenings of his doing to the nation. He may not seen to be filthy rich but his family is, and capable to raise RM2.9 billion to buy San Miguel, a beer making company, where Muslims are forbidden to live on that type of income. I wonder if he is aware??

  11. Anil, this is one cheapskate assessment of national car policy and Mahathir mindset. IMHO, what Mahathir try to imitates are NOT Japan, but Uncle Sam, Mahathir own big Amerika dream that he think BOLEH applicable to Malaysia.

    Mahathir and many Malaysian think USA is nothing but build on top of US dollar. If USA can do it, why can’t Malaysia scale down and do the same : build a automobile industry and profit ,etc.

    Alas, even a “hard working” Mahathir refuse to learn, what make USA economy strong is CULTURES, industry is all base on strong explorer cultures. Just ask ANY Malaysia school student, is it possible to build a plane using a light frame bicycle, 900 out of 1000 will tell you it is impossible, and the remaining 99 will tell you it is impossible without government funding(sound familiar isn’t right !) . Not until you remind that Wright brother did that hundred years ago.

    Many people say Mahathir Industrialisation idea is something bold. Bare in mind that, before Mahathir heavy industrial come into mind, The good old Penang CM Lim Chong Eu, already make a successful case by attracting light industrial to rejuvenate Penang state economy.

    However, without an freedom education policy, Penang just can’t keep up the man power supplies and transform the industrial to knowledge base economy.

    Mahathir are hallucinating the heavy industrial will help trains up and provide job for millions of Malays businessman and engineer. However, in reality, a spoon feeding cultures are going nowhere, and not to forge the corruption riddance umno cultures.

    Honestly, Mahathir should be given the credit of enable the automobile industrial , that “instantly” hires hundred thousands of worker in upstream and downstream. However, that is only possible after spending the nation hundred billions to create bubbles. Hence, the automobile industrial is nothing but just a Dutch diseases.

    Some argue that Malaysia economy will not be “boot up” easily without the automobile industrial. But nobody can tell Malaysia will not doing worst even WITHOUT Mahathir and his national car policies. And all the information tell us, free market and abundance of talents, is what making a country success. Even when China become “factory of the world”, it still need skillful worker to run machinery.

    Contradict to the common sense, Maahthir “deinvest” on human resources. Mahathir too afraid of people challenge him , thus he clamp down academic freedom, and keep the universities close , using his divide and conquer tricks trying to “drag” non-Malays back, prevent non-Malays open up private tertiary college/universities easy, not without “kow-tow” to umno first, than through a proper academic assessment.

    Without a competitive academic cultures, it is impossible to build an competitive automobile industrial. Because car industrial is never stop moving. And the competitiveness also apply to all sector.

    Just apply Mahathirism that think subsidies and control is everything, the failures is going to repeat by Najib. Without a freedom and strong academic cultures, ETP are not going to move anywhere, especially with propaganda . If propaganda and apple polishing did works, North korea should already become the richest and most powerful country in the world.

    Unfortunately, Malaysia will continue to neglect the importance of cultures. There is no free lunch if any country want to progress. We need a free thinking society more than a “secure” nanny states. As Benjamin Franklin mentioned : He who sacrifices freedom for security deserves neither.

    • moo-t, your observation is bitter truth, bitter medicine even for that … doctor.
      All in short, Malaysia’s racist policies on almost all facets of living causes its impending demise and only beggar state in SEA.
      Only one cure for this sicko syndrome: CHANGE.

  12. kaput. UMNO will make sure its super crony makes super profits again. laws will ensure Proton remains jaguh kampung. for the record, Proton has after 30 years managed to give us lifetime warranty for power windows. TRULY UMNO BOLEH.

  13. The national car received full support from Malaysians who don’t mind dump their good money for a lousy car. Penangites were the one that made Proton the best selling car in Malaysia and they supported Dr M just the way they support LGE now.

  14. After Khazanah’s sales of Proton to DRB, is Proton still considered a national car, Mr. Anil? Sorry, my question may sound stupid, but, I guess it better to be informed.

    Mahathir had not only failed Malaysians in Proton, but, also in all those lopsided agreements with highway concessionaires, with IPPs, you name it, he probably would have screwed it all up, big time!

    Mahathir had failed Malaysians absolutely, and Proton is a living legacy of a failed project, by a Government who abused every instrument at their disposal to bull doze through whatever they want, the way they want! Mahathir, really had denied Malaysians their rights to purchase a car of their choice simply by protecting Proton! Why aren’t all the car makers of the world protecting their makes the way Proton is and the length of time the industry had to be protected? Just another abuse of power by lazy, greedy “leaders”.

    Just look at our northern neighbours, just look at the cars they are driving, just look at the car prices they are paying. Had Malaysia not ventured into that crazy Proton project, all those car manufacturers would perhaps be located in Malaysia! Sometimes, Malaysians must wake up, we should not hero worshipped politicians or leaders. If you do, this is what you get, PROTON!

    Looking back, we produced cars at the same time Hyundai did and KIA was unheard of then. Just look at what semua BOLEH Mahathir did to Proton? Just a crying shame! Hyundai is all over the world and creating waves wherever they go together with KIA and today are giving the Japanese makes a run for their monies, but, Proton? Just another third tier car maker. Proton is really a shame to Malaysians and a grim reminder of our failed national car! It is a shame to see all those plastics on the roads.

    Once you had driven a foreign make, or just another marque, you will never go back to a Proton again!

    Salam Selamatkan Malaysia!

      • Why not try the same demolition job on Penang Hill Railway’s Speedy Gonzales coaches, the tin-fridge trains that stop at the barking of stray dogs.
        BTW, to all Speedy Gonzales Kelisa owners, stop crying and stop speeding! Life is precious during Happy Chinese New Year.

    • Sobri, UR right: Sometimes, Malaysians must wake up, we should not hero worshipped politicians or leaders. If you do, this is what you get, PROTON!

      New Malaysian Dictionary Entry:
      PROTON means truly in every screw (-ups) and nut (case) an acronym for Problems By The Tons. (FYI, this acronym comes directly from the production horses mouths at Proton slippery clean production floor).
      Who would want a problematic industry notwithstanding its high sounding, patriotic, national icon of Problems By The Tons.
      And this industry’s sick syndrome is applicable to most Satu Lagi Projek.
      That fella Mad-Doctor … is the worst egoistic-self-serving national investment advisor since Malaya-rich Merdeka. Sick isn’t it?

  15. To add to all the negatives you have pointed out above…..

    This is the 2nd time Proton has been Piratised to DRB-Hicom. The first time was in 1995, for 28.5% stake, sold off to Petronas in 2000 once the venture became unprofitable in the aftermath of the 1998 financial crisis.

    I fully expect taxpayer funds or GLCs to be employed again when DRB-Hicom tires of the venture (again).

    The usual Malaysian Piratisation model.

  16. Ho 😆 Ho 😆 Ho 😆

    😆 This CORRUPT TO THE CORE B-eNd must be VOTED OUT ASAP before they BANKRUPT this rich country…… 😆

    Ho 😆 Ho 😆 Ho 😆


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