March 31, 2016 10:56 pm JST

End of an era: Mahathir resigns as Proton chairman

CK TAN, Nikkei staff writer

Feisty at 90, former Prime Minister Mahathir Mohamed has finally decided to climb out of the Proton driving seat.

KUALA LUMPUR -- Mahathir Mohamad, Malaysia's longest-serving prime minister, has quit as chairman of Proton Holdings, the national carmaker which he was instrumental in founding in the 1980s.

     Proton, a wholly-owned unit of DRB Hicom, announced the resignation on Thursday in a press statement, and said: "We respect his wish to step down."

     No reasons were given, but the development had been widely expected after the 90-year-old was fired last month as an adviser to Petroleum Nasional Berhad (Petronas), the state oil company.

     The government made the decision to terminate Mahathir at Petronas after he launched a civil movement calling for the removal of Prime Minister Najib Razak.

     Mahathir has fallen out badly over the past year with Najib, a former protege, over financial irregularities involving 1Malaysia Development Berhad, a state fund. He has participated in demonstrations, and recently rallied other opposition figures in a campaign to oust the premier by gathering a million signatures.

     Mahathir had chaired Proton since 2014, and been an adviser since retiring from the premiership in 2003. He remained actively involved with the company, which reached an agreement with Japan's Suzuki Motor Corp. in 2015 to make compact cars.

     Proton has had its domestic market share eroded in recent years by fierce competition, particularly from Japanese marques. Last year, it sold just over 102,000 units, which was about 15% of total vehicle sales.

     Proton was a pet project of Mahathir's from when he ran the country. It started out in 1983 as a collaboration with Mitsubishi Motors, and was one of Malaysia's key industrialization initiatives. The first car rolled off the assembly line in 1985, and at its peak Proton accounted for half the domestic market.

     Mahathir's departure from Proton will likely remove a problem for the company's management, since the carmaker still depends on the government for tax relief and other support.

Asia300

DRB-Hicom Bhd.

Malaysia

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