National carmaker Proton has rejected a report that its locally-developed Campro engine has a technical defect.

Media reports yesterday quoted an analyst as saying that a technical problem had been found in the spark plug columns of the engine chamber.

Proton "strongly denies that there exists any technical defects to the Campro engine", the company said in a statement late last night.

"Proton has subjected the Campro engine to thorough and comprehensive testing. The engine has accumulated more than 25,000 man-hours and successfully completed more than one million kilometres of testing," the statement said.

The Campro engine made its first appearance in Proton's new GEN.2 model, launched in February.

Proton also objected to the report saying that the company was currently producing only 30 GEN.2 cars a day, saying the statement was "not only incorrect but seriously undermines the efforts currently being undertaken by us." It did not give any production figure.

Reviving sales

Trade in Proton shares has been suspended since March 25 to facilitate the group's internal restructuring plan.

Proton's market share tumbled to 49 percent last year from 60 percent in 2002 due to fierce competition from Japanese and South Korean rivals ahead of market liberalisation under the Association of Southeast Asian Nations Free Trade Area (Afta).

Its car sales fell by a sharp 27.5 percent to 155,420 units last year but Proton is pinning its hopes on the GEN-2 (photo) and two other new models expected to be launched this year to revive sales.

Under Afta, import tariffs for most products in the region were cut to below five percent from last year. Malaysia obtained a two-year reprieve for its auto industry until 2005 but it recently said it would further defer reducing duties to the required level until 2008. - AFP