The fourth prime minister said Proton has always been labelled as a cheap or poor quality car maker.
"Now Proton wants to produce cars which are of world standard, but you have to pay a higher price.
"You can't have a good car and pay a bad car price," he told reporters when asked about his immediate plan for Proton.
Earlier on Monday, Dr Mahathir, who is Human Life Advancement Foundation (HLAF) chairman, delivered the keynote address and launched the HLAF Annual Award and Workshop at the Putra World Trade Centre (PWTC).
He said when Proton produced the Preve and Suprima car models, which are of good quality but sell for RM80,000, people claimed the price was too high for Proton.
"The next car of the same quality is RM120,000. You (consumers) want to have cheap cars ok, Proton can produce cheap cars," Dr Mahathir said.
Asked if Proton would continue to produce cheap cars, Dr Mahathir replied: "Proton have to make a living. If consumers want cheap cars Proton will make cheap cars, they run three miles and break down."
Responding to a question if Proton has approached the Ministry of International Trade and Industry (MITI) and Petronas for any funds, he said the car maker had never asked for funding.
Asked if he himself as Proton chairman would approach either for funding, Dr Mahathir replied: "No way, because Proton is a private company now and it is able to make progress in research and development."
Dr Mahathir also said the government was now encouraging importation of cars rather than encouraging local industries.
"When you import cars, money flows out and you don't get any technology from them," he added.
Asked if Proton needs government aid, he said former South Korean President Park Chung Hee during his tenure called up 12 individuals and told them they must go into industry and he would provide the loans and funds.
These companies, like Hyundai, LG and Daewoo, were private companies and their government fully helped them, and because of that today they do not need government help anymore, he added. - Bernama
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