Perusahaan Otomobil Nasional Bhd (Proton) hopes to recoup the RM1.80 billion investment in its Tanjong Malim plant by the fifth year of its operation, says chief executive officer Tengku Tan Sri Mahaleel Tengku Ariff.

"It would depend on the market demand, new models coming up and the amortization policy," he told reporters during a visit to the national car manufacturer's new plant.

He said for similar projects of that size, it would take about 10 to 15 years to recoup the investments. However, he said Proton could do it in a shorter period with cost- saving measures and products with higher margins.

Mahaleel said the new plant had an initial capacity to manufacture 250,000 vehicles a year. It was designed for high volume and high efficiency, low manufacturing cost utilizing lean manufacturing production design.

The planners also designed the plant with logistics efficiency using just-in-time, just-in-sequence and the Japanese Kanban concept, highly efficient and effective factory production system.

"The cost savings of the Tanjong Malim plant would be in the region of 20 per cent (compared with) that of the Proton plant in Shah Alam," he said.

Asked whether cost savings would mean cheaper cars, Mahaleel said it was Proton's policy to make cars affordable to a greater section of the public.

The first car, a new model, is expected to roll out from the new plant later this year. As of April 22, the plant was 72 per cent complete with construction at 90 per cent and equipment installation at 56 per cent.

The factory will have a stamping plant, body shop, paint shop, trim and final shop and an engine and assembly plant.

The new factory was designed using a modular expansion model with four modules each with an annual production capacity of 250,000 cars to one million cars.

Under phase one, Proton is investing RM1.8 billion with a production capacity of 150,000 cars a year at the 97.2 ha site, or 19 per cent of the 518 ha being developed. About 2,000 workers would be employed at the plant.

He said the new plant would provide Proton a bigger launch pad for exports with 40 to 50 per cent of future production for the export market including completely knocked down (CKD) units to its assembly facilities in China and Iran. The company would also explore the possibility of entering into a strategic alliance with another car manufacturer to assemble their vehicles at the Tanjong Malim plant.

The plant is part of the Proton City development project that includes a vendor industrial park, residential and commercial, Universiti Pendidikan Sultan Idris (UPSI) and schools.

The total development cost of Proton City project is about RM6 billion with the UPSI and other Proton City infrastructure adding RM2 billion each.

Mahaleel said after the completion of the Proton plant in Tanjung Malim, the main production line would be shifted from its Shah Alam factory.

However, the research and development facility, test track and older engine line would remain at the Shah Alam plant, which has a production capacity of 230,000 cars a year.