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.

– 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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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… Read more »


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 ….

Din Yunus

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…

semuanya OK kot

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.


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….


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 .


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… Read more »


Correction on link.

4. Tsunami – Read Pg 173 on…

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 the Asian miracle – Edith Terry – Google Books –



Another of Mahathir’s folly.

najib manaukau

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… Read more »


“National car policy a big mistake” Anil, 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… Read more »


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?

Dr. Amir

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… Read more »


nice one !


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… Read more »


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.


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.

ong eu soon

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.

Ahmad Sobri

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,… Read more »


I drive a Proton because its the cheapest make that I could afford otherwise I will not drive one

Ahmad Sobri

Aha, I just received this. For your viewing pleasures, folks! Proud?

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… Read more »

Andrew I

Here’s a dedication to a mega big spender from the Lady Gaga of yesteryear, Shirley Bassey.


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.

Ho Ho Ho

Ho 😆 Ho 😆 Ho 😆

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

Ho 😆 Ho 😆 Ho 😆


Proton Pontianak the creation of apanama is sucking the blood of taxpayers since 1985 !!!!!!!!