(AFP) National carmaker Proton today denied a report it had temporarily halted production of its new multi-purpose vehicle the Juara due to poor sales.

"Although production has been brought down as there is already sufficient stock to meet the current demand, Proton wishes to stress that there is no plan to completely stop the production of the Juara," the company said in a statement.

About 950 units of the Juara had been sold since it was launched in July "and this figure is in line with Proton's projections given that it is a new entry into a niche market."

Earlier today the Business Times quoted sources as saying only 850 Juara vehicles had been sold, which was short of the 5,000-6,000 Proton hoped to sell by year-end.

The sources said the existing stock for Juara was sufficient to meet demand and continued production would raise inventory costs and pressure profit margins.

High tariffs

The Juara, the 11th model produced by Proton since it started operations in 1985, is a hybrid vehicle for passengers or goods and represents part of Proton's efforts to widen its product range to prepare for the Asean Free Trade Area (Afta).

At the moment, Proton sells more than six in every 10 new cars in the country and has a 20 percent share in Asean's big four auto markets - Malaysia, Indonesia, Thailand and The Philippines.

But its share will shrink when high tariffs on imported cars in Malaysia must be reduced to no more than five percent from 2005. Under Afta, the tariffs were meant to be reduced from 2003 but Malaysia received a two-year reprieve.