A gradual liberalisation path for the automotive industry is preferred to cushion the impact on Proton and other local car manufacturers such as Perodua and Naza, said the first holder of the Khazanah Nasional chair professor Dr Rajah Rasiah.
“We seem to be heading in that direction. I think the Government has to look into some kind of solid strategy for liberalisation so that there will be a soft landing for Proton,” Rajah told StarBiz.
“We may also relook or rework the institutions that is necessary to govern and lead the (automotive) industry forward and be upgraded eventually. So far they (Government) have not been able to do it,” he added.
Speaking at his lecture Market Power and Institutions at Universiti Malaya, he said Proton may have made a mistake when it bought Lotus.
“Lotus is a high-end low quantity market while Proton produces cars for the common market with low margins and high volumes,” he said.
He also pointed out there was no proper technology transfer agreement with other car companies for the case of Proton such as what Hyundai had with companies like Mitsubishi.
“Theirs was a very extensive transfer and was very well appraised. We didn't have those sort of transfer. We never had the sort of transfer agreement in Malaysia where specific targets were mentioned, appraised to see what was achieved,” Rajah said.
“We only registered the agreement but never actually monitored, appraised and use the mechanism to better manage the system,” he said at the question and answer session of his lecture here.