National car maker Proton said that it has begun pitching its engineering and technical expertise to Iran amid expectations of a boom in the auto market there.

Chief executive Mahaleel Ariff is in Iran on a five-day sales mission to offer Proton's help to develop a new generation of Iranian national cars, Proton said in a statement issued to Bernama news agency.

With a population of 65 million, Iran has huge potential with domestic vehicle sales forecast to jump about 32 percent this year to 700,000 units, Proton said.

The Iranian national cars, the Pykan and Samand, currently lead the domestic market, selling an average of 150,000 units a year.

Selling expertise

Proton said its cars already have a market in Iran, with the sole assembler and distributor Zaqross Khodro beginning mass production of the Wira 1.5 litre model in August last year.

Mahaleel said in the statement he would make sales presentations to officials from potential Iranian customers, as well as government and public institutions.

The mission to Iran is a follow-up on President Mohammad Khatami's call on Muslim countries to establish stronger economic relations.

Maheleel said Proton could now offer its expertise to other car manufacturers and governments under strategic alliances following its restructuring in May.

"The Proton today is not about selling cars but our expertise, capabilities and resources combined with that of the Lotus Group, presented us with the opportunity to sell such services," he said.

With 1,700 engineers under Proton and its British unit Lotus, the group has the capabilities to also produce boats, motorcycles, military vehicles and light aircraft that it has yet to venture into, he added.

Core businesses

Proton in May unveiled a surprise revamp to gear for greater foreign competition when the market is liberalised in 2005 under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta).

It will see a new holding company take over Proton and its listing status. The group will be streamlined into four core businesses of manufacturing, engineering, marketing and ancillary services.

Analysts say the new structure gives the carmaker flexibility to expand into other businesses and seek foreign partners without losing control.

Tariffs on imported cars in Southeast Asia fell below 5 percent in January under AFTA but Malaysia has obtained a reprieve for its auto industry until 2003. - AFP