Prime Minister Dr Mahathir Mohamad has assured that the mooted third national car project will be fully funded by "private entities" – such as SilTerra Malaysia Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd.

"We welcome the willingness by private entities such as SilTerra to lend its expertise in the new national car project.

"SilTerra is Khazanah's sister company, and it is capable of producing car components following its vast experience in making semiconductor chips for various industries for more than two decades," he said.

Mahathir said this a parliamentary reply to senator Chai Kim Sen, who asked whether the RM20 million grant for the project is actually to help GLCs like SilTerra, which recorded cumulative losses of RM7.3 billion for 10 years up to 2011.

The prime minister added in his reply that as part of Khazanah, SilTerra plays a crucial role in the country's strategic interests in terms of being a catalyst for technology investment in Malaysia.

The company recorded annual earnings of RM600 million on average, Mahathir said, and profits of RM60 million for three consecutive years.

He also stressed that the third national car project is not just about making a car, but also utilising the talent pool and resources in the country to create an ecosystem in which entrepreneurs and industries can thrive.

The project, he added, would create job opportunities for youths – especially local engineers, which will help make Malaysia a producer.

In January, Entrepreneur Development minister Redzuan Yusof said that there would be no future bailouts at the expense of public funds for the third national car project.

Mahathir voiced the proposal to create a new national car to replace Proton last June.

He said at the time that Proton could no longer be considered a national car, as almost half of its equity had been sold to China's Zhejiang Geely Holding Group.

Geely acquired a 49.9 percent stake in Proton in 2017, with the remaining 50.1 percent held by DRB-Hicom.