July says that Malaysia’s Prime Minister, Mahathir Mohamad, may consider restricting foreign car imports to protect the country’s “infant industry”.

South East Asia’s third-largest economy has “liberalised its automotive industry” over the past decade, allowing cheaper imports, and local automotive manufacturer Proton has struggled to stay afloat in the face of increasing competition.

Besides Proton, the other Malaysian car makers are Perodua and Naza.

Honda Motor Co, Toyota and Nissan sell both imported and locally assembled cars in Malaysia.

Perodua is the domestic market leader, with about a 40% share in 2017, according to data from the Malaysian Automotive Association, while Honda is the top-selling foreign brand, with a market share of about 21% last year.

Proton was founded in 1983 in an industrialisation push during Mahathir Mohamad’s previous tenure as Prime Minister.

Its domestic market share peaked at 74% a decade later, as motorists took advantage of low-cost loans that encouraged them to buy ‘home grown’ products.

Low levels of quality, limited after-sales service and competition from foreign car makers saw Proton’s domestic market share fall to around 14% in 2017, but the company received a boost last year, when the Chinese automotive manufacturer Zhejiang Geely Holding Group Co Ltd bought a 49.9% stake — Geely’s first foray into South East Asia.

When questioned, Mahathir Mohamad said that the developed countries have used conditions such as Euro 5 emission standards and certain tax structures to work around free trade arrangements and block Malaysian car exports.

“That is why we need to study the possibility of certain conditions, so that foreign cars cannot enter so easily into our country, giving Proton and local cars the chance to dominate the local market.”