Why Malaysia’s national car 49.9pc owned by the Chinese, is driving into an election storm

M alaysia ’s national car, Proton, has long been a source of nationalistic pride while simultaneously a long-struggling company. Established in 1983, it was a sign of the then-agrarian nation’s move towards industrialisation, the cherished brainchild of former premier Mahathir Mohamad. But the flagship national car has long been flagging, grappling with declining sales and losses of hundreds of millions of ringgit yearly. By last year its market share had diminished to barely 12 per cent.

Last month, China’s Zheijang Geely Holdings Group stepped in, acquiring a 49.9 per cent stake in the national car manufacturer for 460.3 million Malaysian ringgit (US$107.3 million) from Proton’s parent, DRB-Hicom. Malaysia’s Prime Minister Najib Razak said at the June signing ceremony that the “strategic partnership” would be what Proton needed to turn itself around and become a Malaysian success after losing “hundreds of millions of ringgit” a year.

But this new acquisition is raising hackles as Malaysians question China’s increased investment into the country and the potential loss of a symbol of nationalism.

The Proton Saga: why would Malaysia sell its ‘symbol of dignity’ to China?

Ibrahim Suffian of independent opinion polling firm Merdeka Centre, believes that the Proton issue will be used during the upcoming general elections, pitting the National Front against an opposition helmed by Mahathir.

“For the last three decades Proton has been sold to the Bumiputras as an economic coming of age, our move from an agrarian economy to an industrialised one. It was the embodiment of the technological progress acquired by the community. Domestically, the narrative was that the children of farmers are now carmakers,” he said, adding that while perceptions of Proton as a brand and product may differ – complaints of poor quality are commonplace – but as a national project it remains a symbol of pride and progress.

“The notion that it has been sold to a foreign company, a Chinese one, can be disconcerting for conservative nationalists, particularly at a time where leadership is being criticised over a number of issues related to cost of living and austerity. It creates the impression that the country isn’t as strong as it used to be,” he told This Week in Asia, drawing parallels between the Geely-Proton deal and the now-scrapped Trans-Pacific Partnership and how it was perceived as “selling out national interests”.

“Government critics have not yet capitalised on this, but looking at how they’ve come together, particularly under Mahathir, they will definitely speak out to draw distinction between themselves and the incumbents.”

Mahathir, who is currently chairman of the Malaysian opposition alliance, previously alleged that the decision to sell part of the politically sensitive Proton was an act of revenge by the current regime, writing on his blog: “Proton, the child of my brain has been sold. It is probably the beginning of the great sell-out. The process is inexorable. No other way can we earn the billions to pay our debts. The only way is to sell our assets. And eventually we will lose our country, a great country no doubt, but owned by others.”