INTRO

PROTON

Perusahan Otomobil Nasional Berhad (PROTON) was incorporated in May 7, 1983 to

manufacture, assemble and sell motor vehicles and related products, including
accessories, spare parts and other components. PROTON produced Malaysia's first
car, the Proton Saga, commercially launched on July 9, 1985 by then Malaysian
Prime Minister, Dato' Seri Mahathir Mohamed, who had originally conceived the idea
of a Malaysian car.

Its model line-up includes the Waja, Satria GTi, Wira, Iswara, Arena, Perdana V6 and
Juara. The range of 1.3, 1.5, 1.6, 1.8 and 2.0 litre engines satisfies a wide spectrum
of customers both locally and abroad. PROTON's main plant in Shah Alam, with an
area of 923 900 sq metres, was originally designed for a capacity of 80 000 units
per year. In 1997, capacity increased to 230 000 units per year with the
construction of the Medium Volume Factory, which is next to the Main Plant. Today,
the Shah Alam factory is capable of producing 240 000 vehicles per year.

Besides being shareholders, Mitsubishi Corporation and Mitsubishi Motors

Corporation are also PROTON's technical assistance partner and component
supplier. PROTON has a total of 11 subsidiaries and 11 associate companies, which
are involved in manufacturing, research and development, sales and service
activities.

December 30, 1996, marked the launch of the Proton Putra, a two-door coupe, as
well the production of our millionth car from the Shah Alam plant. PROTON made a
major step in upgrading its engineering capabilities with the acquisition of Lotus
Group International Limited, a British automotive engineering company and
manufacturer of luxury sports cars in October 1996. Together, PROTON and Lotus
offer large scale manufacturing capabilities with world-class engineering expertise.

PROTON cars are making their mark internationally as competitive and innovative
automobiles. They are now being exported to 50 countries including the highly
competitive United Kingdom and continental European markets. With concerted and
unswerving commitment from customers, business associates, shareholders,
government agencies, and employees, PROTON is realizing its goal of being an
internationally successful Malaysian automotive manufacturer. It is achieving this by
being customer oriented and by producing competitively priced and innovative
products. Thus, it is contributing to Malaysia's attainment of Vision 2020.

With solid base built up over the last 10 years, Malaysia's car manufacturing
industry is progressing vigorously. Below are important events that led to the
incorporation of Perusahan Otomobil Nasional Berhad (PROTON) and its
achievements.

SECTIONS OF R&D

Vehicle Platform

This department is responsible for vehicle development programmes covering:

- Product Strategic Planning

- Styling

- Engineering Design

- Supplier Development Programmes

A main user of the sophisticated ALIAS software, and CATIA advanced 3D modelling
software in the automotive industry, PROTON's Vehicle Program team, working
closely with Lotus leading-edge consultancy services, has many years of expertise
in creative design and components engineering.

Prototype Centre
PROTON’S leading-edge facilities and high precision tools allow error-free
prototypes to be built with extremely short lead times. The prototype centre is
made up of the following.

Clay Modelling

3D scale models allow designers and engineers to conduct feasibility studies on

preliminary designs.

Rapid Prototyping

Extremely fast production of prototype samples is possible during the

development timing.

Prototype Shop

Full functioning prototypes are developed, as per vehicle design specifications. This
enables testing to be carried out.

Powertrain Engineering

Besides developing independently designed engines and transmissions, PROTON's

Powertrain Department is also fully capable of calibrating and developing its own
Engine Management Systems (EMS). This department is responsible for the
development of cost-competitive, customizable and commercially viable engines
and transmissions that exceed international benchmarks and standards.

It is also actively involved in evaluating future technologies that have the potential
of being adapted to vehicles. Current projects include research into introducing
environmentally friendly solutions such as natural gas vehicles and developing palm
oil-based fuels.

PROTON is also tracking hybrid technology - the combination of electric and internal
combustion engines that effectively reduce engine emissions to build more
economical and environmentally safe engines.

Besides developing independently designed engines and transmissions, the

department is also fully capable of calibrating and developing its own engine
management systems (EMS).

This Department performs a regulatory and management function:

Researching, planning & developing new technological advancement in R&D for:

- Vehicle Architecture

- Styling Visualization

- Digital Mock-Up

- Maintaining a product engineering parts database for Vehicle Development plan

- Managing data communication related to engineering designs with vehicle

programs and PROTON

Vendors

- Engineering CAD data & drawing control

- Developing & managing the R&D Engineering Centre

- Centralizing CAD/CAE/CAS for vendor utilization

Engineering Research
Established to spearhead PROTON's entry into cutting-edge automotive
technology, this department is involved in advanced powertrain and
vehicle research including:

- Natural Gas Vehicles (NGV)

- Hybrid Powertrains

- Active Suspension System

- Multiplexed Communicators

- Advanced Composites

FUTURE PLANS

• Chinese automaker Youngman’s Europestar brand is building a new car,

engineered by Lotus. It uses components carried over from the GEN2. Lotus
is being paid about US$20 million for the work, and Proton also gets
licensing for this new car’s platform once it rolls out. This could be the car
we saw yesterday.

• Proton’s new model investments will be in core models. Models with lower
volumes such as a Perdana replacement will be through collaborations.
There is no sense in spending half a million ringgit investing in a Perdana
when it will not get the kind of sales the Saga (5.5k to 6k) and Persona
(3.5k to 4k) currently gets.

• The Campro’s lifecycle will end in 2014, after of which a new engine will
replace it. Protons is currently looking at two different options, but are still
looking at other OEMs. They hope to decide where the new engine will
come from by next year.
• Proton will be consolidating its plants to Tanjung Malim in 3 years time. The
Shah Alam plant’s land can be utilized better than its current use as it is
appreciating in price now. A sale to Sime Darby?

• The Waja replacement model will be coming next year. The Perdana will
come in 2011. We will get an all-new global model to replace the Persona in
2012. That would mean the Persona will be replaced after a 5 year lifecycle
(well, it’s longer actually if you consider the Persona a GEN2). Proton plans
to continue a typical Japanese 5 year lifecycle for all its products, but this
could go to 7 years (like premium conti lifecycles) at most.

• The new 2012 Persona replacement model will be styled by an Italian

company instead of Proton’s design team led by Azlan Othman.