Malaysian national car maker Proton names former Prime Minister Mahathir Mohamad as chairman. The often controversial 88-year-old also becomes chairman of subsidiary Group Lotus.

Mahathir, the driving force behind the creation of Proton, had been an advisor to the company since late 2003 after stepping down as prime minister.

Proton says in a statement Mahathir was instrumental in the conception and progress of Malaysia's automotive industry.

“It was his vision, ideas and leadership that has guided Proton since its inception in 1983,” the company says in a statement.

It says Mahathir is determined to see Proton succeed and it is most appropriate and natural for him to step in as chairman.

Khamil Jamil, Group Managing Director of DRB-Hicom, Proton’s parent company, says Mahathir now will be able to dedicate more of his time at Proton, “which will certainly continue to strengthen Proton in its mission to become a globally recognized automotive player.”

Mahathir’s appointment sees Khamil Jamil step down as the executive chairman, but remain as a member of the board of directors.

The English-language newspaper The Star says industry observers view the appointment as a last-ditch attempt by the former prime minister to protect his legacy.

“The jury though is out on whether the appointment of Mahathir will be a good move for the company,” it says.

The newspaper quotes an industry official, who requested anonymity as saying DRB-Hicom should not have appointed Mahathir as chairman.

“I don’t think it’s a good move,” the official is quoted as saying. “Mahathir is still quite sharp but that does not necessarily make him a good businessman. Having passion and being able to run a business are two different things.”

Others tell the newspaper Mahathir is what Proton needs. Their argument is Mahathir will have more clout than anyone in seeking incentives and protection from the government.

Mahathir’s appointment follows that of DRB-Hicom group director for automotive and defense Abdul Harith as CEO after the resignation of Deputy CEO Lukman Ibrahim.

The Star says investment company PublicInvest Research likes the Mahathir appointment.

The investment house says in a client note it believes Mahathir’s appointment should pave the way for him to take a more active role in transforming the national automaker, which has seen its market share fall to 29% at the end of last year from 53% in 2001.

“We view Mahathir’s appointment…as positive for DRB-Hicom, as we believe his clout within the government and auto industry is beneficial for the automotive maker,” PublicInvest Research says.