Former premier Dr Mahathir Mohamad today defended national carmaker Proton against government attacks and attempted to quash rumours that its chief executive faces the sack.

The press has widely reported that Proton chief executive Tengku Mahaleel Ariff was reprimanded after he criticised government auto policy and claimed Proton had been "poorly treated".

Mahathir, an adviser to the carmaker which he helped found in the 1980s, told reporters that he was not aware Mahaleel faced being sidelined and that his actions were justified.

"Tengku Mahaleel was duty bound to protect the name of Proton. What has been said against Proton has undermined Proton's credibility and therefore its sales. A good CEO must defend," he said.

However, he said that some changes to the boards of Proton subsidiaries were under consideration, which could remove the CEO of the main company from their line-ups.

Mahathir, the chief architect of Malaysia's automotive industry, also defended Proton's performance in an apparent reference to Trade Minister Rafidah Aziz's recent comments that its shoddy quality was hurting sales.

"What hurt us is accusations that Proton is not selling because it is of inferior quality. It is not," he said, adding that the real problem was an unchecked flow of underpriced imports.

"When people start saying that our cars are of poor quality, naturally it undermines the sales of our cars, especially when the person making that statement is very high up and responsible," he added.

Review the permit scheme

Mahathir called for a review into the permit scheme which allows companies to import cars into Malaysia, claiming that many were under-declaring the value of the vehicles.

"These cars compete unfairly with Proton," he said of the national automaker which is struggling to cope with a new, liberalised market environment.

He defended the price of Proton models, saying that the company performed a dual role of building up Malaysia's automotive engineering capability.

"To do that, Proton will have to put up with higher prices, with poor quality, Proton has got to go and ensure that these factories are capable, or help them improve the quality of their product."

The national carmarker used to sell six out of every 10 new cars in Malaysia but growing foreign competition is eating into its market share, which fell to 44 percent in 2004 from 48 percent in 2003.

Rafidah said last week that Proton must look at its own weaknesses and not blame other factors for declining sales.

"Do not blame anybody else. Look inward into your own company and see what your shortcomings are and find your own market segments," she said.