SALES of a new model to be launched officially this month by Malaysian car company Proton Holdings will be scrutinised for clues to the company's viability as a standalone player.

Described by Proton managing director Syed Zainal Abidin Syed Mohamed Tahir as "the ideal New Year's gift to the nation", the new compact car was open for online orders from Jan 1.

Priced between RM30,000 and RM40,000 (S$13,000-17,000), the 1.3 litre vehicle is the first launched by Proton since it became known in November that planned partnership talks with Germany's Volkswagen had been scrapped and it was thought that Proton could survive on its own.

Proton's second new model launch in less than six months comes on the heels of better demand for its 1.6 litre Persona - the model preceding it - and should show whether Malaysia was justified in calling off talks with VW.

The tagline of the model code-named BLM is "A new saga begins". Proton's first car was called the Saga.

Early indications on motoring blogs appear generally positive, with enthusiasts also liking the car's attractive pricing. Some believe the model, which will be offered in a choice of seven colours, could claw back market share from Malaysia's second national car maker Perodua, which in partnership with Japan's Daihatsu has now outsold other rivals and boasts a near 40 per cent share of the local market.

In contrast, Proton's fortunes have slipped considerably. At its peak, almost two out of three cars sold in Malaysia were Protons. But the gradual liberalisation of the auto sector and the lowering of excise duties on imported makes have resulted in greater numbers of car buyers opting for foreign brands.

Proton's market share has shrunk to less than a quarter, and even taking sales from Perodua now will not be easy. Perodua's quality is perceived as better. And Perodua's managing director Syed Hafiz Syed Abu Bakar 2007 sales to have risen 3 per cent to 160,800 vehicles.

The Malaysian Automotive Association has projected total car sales of about 500,000 this year, up from 475,000 to 480,000 units in 2007. But expected hefty hikes to fuel prices later in the year could hit car sales.

Proton's BLM model, widely believed to be a replacement for the Iswara, is the company's sixth variant fully developed and built on its own. But Proton will have its work cut out. Its profit in the latest quarter to end-September 2007 was a mere RM3.5 million, albeit a big improvement from a RM591 million loss for the fiscal year ended March 2007.

Lacking economies of scale, Proton's annual sales do not top 200,000 units including exports, which are minimal. It has recently clinched a few contracts to produce cars for other manufacturers such as the Chinese, but the numbers are relatively small. Korean carmakers, late-comers to the game, boast annual sales of over a million cars.