Proton applies brake on AP car project

According to him, the Malaysian company was carrying out an analysis of the project, but admitted that any progress would be possible only after the restrictions on external investments are relaxed. This would, of course, depend on when the Malaysian financial crisis wouldease.

While sources in Malaysia circulated the version that Proton was looking for greener pastures in Europe, Parakh denied knowledge of any such move by the company.

In fact, representatives of Proton visited Visakhapatnam some time ago and studied the site offered for setting up the project. Besides the land, the state government was willing to extend all incentives generally offered to any private project. Though the invesments by the Malaysian firm was not finalised it was estimated to be anywhere between Rs 600 crore and Rs 1,000 crore, depending on the size of the plant and the models the company planned to build.

Parakh felt that the economic crisis in Malaysia may not affect development of the Kakinada port in the private sector because it does not involve much capital.

The company owned by the son of Malaysian Prime Minister Mahatir Mohammed is said to be favoured for awarding the project. But Parakh said that the project was not awarded to anyone so far and that “discussions are stillgoing on”. With this, fate of yet another car venture in India is sealed.

Earlier, French car major, Peugeot decided to get out of India after suffering huge losses. Other US car majors like, Ford Motors, General Motors and Daewoo are have failed to make any dent in the auto market which is dominated by Maruti Udyog. The third US car major, Chrysler was in talks with some Indian industrialists, but decided to concentarte on its home turf. Thus, due to the depressing performance by the foreign car makers in India, the decision by Proton to get out of India is correct.