This paper considers the ways in which Malaysia has tried to develop automotive production through promoting a nationally owned car producer, Proton, and to carve out some “policy space” to continue a degree of protection whilst also liberalising its trade regime. We show that protection has not yet succeeded in making Proton and its many vendors internationally competitive, and why Malaysia has found that it has to secure the cooperation of a major automotive multinational to upgrade and to achieve export success. [ABSTRACT FROM PUBLISHER]