Malaysia's Proton plans new car models in 2007

KUALA LUMPUR (Reuters) -- Malaysian automaker Proton Holdings Bhd unveiled plans today to introduce new models this year, aiming to boost sales in a home market that skidded into reverse last year.

State-controlled Proton has a weak record on new product launches and several of its most successful models such as the Wira and Iswara sedans are about 10 years old.

That and its poor reputation for quality have prompted local buyers to opt for cars made by foreign firms such as Japan's Toyota Motor Corp. and Korea's Kia Motors.

"This year there will be many significant changes that will be done to our product line-up," Proton Managing Director Syed Zainal Abidin Syed Mohd Tahir said in a speech on Friday.

"There will be a brand new model that will be introduced in the middle of the year and the end of the year, coupled with some fresh and exciting product variants that we hope to introduce."

He gave no further details.

Industry analysts say loss-making Proton must introduce new cars and update older models to help it compete against Japanese and Korean carmakers.

With domestic sales shrinking and little profile abroad, Malaysia's government has said it is prepared to sell a stake in Proton to a foreign car maker, and has held talks with several potential partners -- including General Motors, PSA Peugeot Citroen and Volkswagen.

Syed Zainal said talks with GM were ongoing at the shareholder level, and talks with other foreign firms would be finalized in the first quarter.

The Malaysian government controls Proton through its state-investment firm Khazanah Nasional Bhd.

Proton, launched in 1985 by ex-Premier Mahathir Mohamad to help give Malaysia some industrial clout, has a new, under-used plant north of Kuala Lumpur and offers foreign partners a cheap production base in Southeast Asia, whose population is close to twice that of the United States.

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