KUALA LUMPUR: Proton Holdings Bhd is recalling 34,000 Savvy cars due to a faulty rear wheel-bearing component.

During a random check recently, the company found that water could enter the rear wheel-bearing housing, causing the component to malfunction.

The recall comes two years after the launch of the Savvy.

"As a precautionary measure, we are recalling all Savvys for inspection and repair. We apologise to all Savvy owners for any inconvenience caused," said its managing director Datuk Syed Zainal Abidin Syed Mohd Tahir.

The announcement is a blow to Proton, just as it is beginning to close the gap between itself and market leader Perodua. At the end of February, it had some 25.5 per cent of the market, compared with 31.8 per cent for Perodua.
"The timing is very unfortunate. I'm sure it will hurt Proton's reputation to a certain extent," said Pong Teng Siew, research head of MIMB Investment Bank.

Proton did not say how much it will cost to fix the problem. However, local mechanics said a rear wheel-bearing component may cost between RM150 and RM200 each.

This is not the first time that Proton has recalled its cars. In 2005, it recalled 2,996 Waja cars, due to faulty alloy wheels.

"This is the industry norm. It happens all over the world. It's always better for them to initiate it (a recall), before it's too late," said Malaysian Automotive Association president Datuk Aishah Ahmad.

All Savvy owners are advised to take their cars to the nearest Proton Edar or EON service branch for an inspection. Proton will make the necessary replacements at no cost to customers.

Proton Savvy was launched in the second quarter of 2005. More than 550 units were sold in the first two months of this year.

Proton posted a net profit of RM10.3 million in its third quarter ending on Dec 31 last year after it made a loss of RM281 million in the same period in 2006. Sales jumped by 51 per cent to RM1.45 billion.