This is my response to OutSyed The Box blogspot regarding his article on proton/AP. That article can be read here :
I've tried to reply to the blog directly, unfortunately it didn't get through. Maybe it's because the comment is very long. Anyway, I've written the reply here because I feel it is very important to correct some mistakes in his article. There are several factual mistakes, misleading information and unfair comparisons in that article. I've addressed all of them in the following section which is supposed to be my reply in his blog.
1. Tuan syed, Most of the time I will agree with your articles but not this one. It has so many mistakes. Perhaps you have some confusion.
2. Maybe you are confuse between AP and import duty. AP is the Approval Permit or permit to import cars and import duty is the duty imposed by the government to all imported cars (CBU).
3. Even without AP, the government can still impose the import duty. If you are angry with the higher imported car prices in Malaysia, you should blame the import duty and not the AP. If you want to blame the misuse of AP system (those who sell the AP), then you can blame the AP system or the AP holder. And perhaps you should try to understand the whole concept of AP and import duty and why they are proposed by Tun M.
4. I would suggest you to read about proton and what is the main objective of that industry. Please refer to this link : http://chewal.blogspot.com/2008/07/selamat-hari-lahir-proton.html. I've done a bit of research myself since 2003 and have written about it in the BN backbenchers forum 9 years ago. The forum has died.
5. In that article, I've written the history of automotive industry in Malaysia and why Tun M proposed the proton project.
6. The most important thing is, Proton is not purposely made to just produce car. It is far beyond that. It is about complete development of a nation, people and the country. In a simple word, what Malaysia has achieved today is because of proton. The reason why we can escape from the 1997 economy crisis is because of proton. The reason Tun M's recipe to solve the 1997 economy crisis works is because of proton. As always with all Tun M policy and ideas, you have to think outside the box to understand it. Ironically, its the name of your blog. You have to think far ahead to get the gist of his idea.
You can read about Proton and its objectives here :- http://chewal.blogspot.com/2008/08/kepentingan-proton-kpd-bangsa-agama-dan.html
7. With Proton, Tun M is not developing an automotive industry but he is developing a nation.
8. Now, back to proton as automotive industry. does it fail? the answer is big NO. you can read that article, why proton is a big success. In that article you can see how proton was developed inline with international automotive industry roadmap. everything since the IMP 1 is in accordance to the international roadmap. Even the import duty as the means of protection is inline with international automotive roadmap and this is a common practice with ALL automotive industry in the world. Refer to the article the meaning behind direct and indirect protection.
8. Regarding, AP, in that article I've mentioned why it was imposed. Actually, it has nothing to do with proton because even without AP, the import duty can still be applied to protect proton. However, if the AP is misused and the imported car is undervalued, it can affect proton.
9. In your article, when you compare the price of passat with waja, you are not being fair. first of all, you are must making direct conversio without any CIF cost and minimum import duty. Please note, even with free trade zone (fta), the government can still impose at least 5% import duty. So the price for that passat can be around RM 78,000. Now, you must also know that proton cars sold in Malaysia are subject to sales and exsais duty. If you want to compare duty free waja, please refer to the price in Langkawi. Langkawi is fta where only minimum duty is applied. the price for waja is RM45,000. Now, you can see the different between passat and waja price on the same level playing field. The different is about RM 30,000.
10. Btw, the import duty tariff for imported cars have been reduced according the industrial master plan. the import duty 5 or 10 years ago is higher compared with what you are paying now.
11. Proton development is nicely following the plan except during the blunders made by Pak Lah regime. That 5 years has turned everything backward.
12. Some facts about proton... Proton is the only GLCs bar Petronas that did not asked any help from the government during 1997 economy crisis. Please note, KIA of korea has gone bankrupt during 1997 crisis and almost being sold to outsiders if not with the help of korean government through Hyundai. Proton is the only GLCs that has paid all the government loan earlier than expected. Proton built the Tanjung Malim plant with its own money without any help from the government. Even with tanjung malim plant, Proton still has substantial amount of cash reserve. and...Proton does not need to buy condo to support its business model.
12. Actually, there are a lot more that I can write about Proton and the big picture of people development through the project but I will stop here.
13. I really hope that you can read and understand and make correction where necessary in your article.