become well-established in Malaysia by the 1970s. Inflation of car prices Prices of new cars in Malaysia had inflated significantly through the 1970s, with most if not all locally assembled CKD models generally costing more to produce than an equivalent CBU import. The inflation of new car prices was attributed to several factors, including low efficiency and inadequate economies of scale among the parts manufacturers and assembly plants, the government's mandatory CKD deletion policy, high import and excise taxes for the CKD models, and various others. Additionally, the automotive industry in Malaysia was held back by a small domestic market, and manufacturers primarily served domestic demand and did not emphasise exports, thus limiting the growth and competitiveness of the industry as a whole. 1980s The National Car Project By the dawn of the 1980s, the government concluded that direct involvement was necessary to reverse losses and spur future industrial growth. The National Car Project was drafted in the early 80s with the objective of accelerating technology transfer, increasing and rationalising local content, and involving more bumiputera entrepreneurs in the then largely ethnic Chinese dominated Malaysian automotive industry. The National Car Project would lead to the founding of Perusahaan Otomobil Nasional Sdn. Bhd. (Proton) in May 1983, and the launch of the Proton Saga in July 1985. Malaysian automotive market Annual sales TIV Manufacturers sales Top-selling manufacturers Top-selling models Vehicle population According to the Ministry of Transport, the active passenger car population in Malaysia stood at 11 million units in 2014, with 10 passenger cars for every 27 citizens. An independent study estimated that the population stood at around 8.2 million units in 2014, after factoring in variables such as scrapped and permanently disabled passenger cars. Malaysian car companies Proton Perodua Naza Inokom Bufori TD2000 Automobile production plants in Malaysia Proton National car company Proton currently operates three manufacturing plants in Malaysia, with a combined maximum annual capacity of 360,000 units. The original Proton plant in Shah Alam was built in 1985, and was later complemented by the smaller MVF plant in 2000. The third Proton factory near Tanjung Malim commenced operations in 2004, and was built as part of the Proton City project. Perusahaan Otomobil Nasional (PONSB) handles operations at both plants in Shah Alam, while Proton Tanjung Malim (PTMSB) operates the plant at Proton City. Proton's first plant commenced operations in mid-1985, with the first unit being a Proton