The national auto industry needs to be sustained if Malaysia is to have a positive balance of trade," says former Prime Minister Tun Dr Mahathir Mohamad.

He noted that there would be a RM12 billion outflow from the country if all cars are imported, and at the same time, certainly increase the trade deficit.

"The national car has clearly contributed much towards reducing Malaysia's trade deficit and helped in the establishment of engineering industries, extending well beyond automobile manufacturing.

"It has also helped qualify Malaysia as a developed country which requires a high level of industrialisation, sophistication of economy and per capita income," he added.

Dr Mahathir, who is also the Proton Advisor, said the national car maker, while not earning much money from exports, had still helped the country by preventing an outflow of money, through the purchase of foreign cars.

Speaking at a special luncheon in conjunction with the 4th Kuala Lumpur International Automotive Conference today, he said of the 600,000 units of cars sold annually, half the number was locally made.

"Assuming an average price of RM40,000 per unit, the total sales value would be about RM12 billion. This additional amount will be an outflow out if all cars are imported.

"Taking everything into consideration, Proton has contributed much towards the nation's economy and its development," Dr Mahathir added.-- Bernama