LONDON (THE STAR/ASIA NEWS NETWORK) - Still championing his cause for a third national car project, Malaysia's Prime Minister Mahathir Mohamad rubbished claims that Proton was a failure.

At a dialogue session with about 200 Malaysians in Britain, he argued that the first national carmaker had achieved much success under good management, according to Bernama.

He said Proton had accumulated RM4 billion (S$1.32 billion) in reserves and built a plant in Tanjung Malim with its own money without asking for government assistance or borrowing from the bank.

According to him, Proton had been a success until foreign cars were allowed to enter the country unrestricted, with conditions imposed on the sale of Malaysian cars in other countries.

"It was all about importing their cars, not exporting ours. Of course, if you don't export your cars, you don't earn foreign exchange," Tun Mahathir said.

"If you keep buying foreign cars, you will lose a lot of money every year," he was quoted as saying by the national news agency.

At the 24th Nikkei Conference on the Future of Asia in June, Dr Mahathir revealed that his government was planning to work on a new national car project.

However, many Malaysians did not respond positively to the suggestion, asking instead that the public transport system be improved.

In the London dialogue session, the Prime Minister continued to champion the third national car project, but reiterated that the government will have to ask the private sector to implement it, as Putrajaya does not have enough money.

"Then you develop vendors and create businesses producing parts. This will create jobs for the people and generate a lot of business for small businesses," Bernama quoted him as saying.

He said a national car would allow Malaysia the opportunity to develop the engineering sector and increase its skills and knowledge.

"It's not just about the car, but the engineering possibilities which the car can lead to as well as the stimulation of other areas of economic functions," he added.