After successfully closing a deal with Volvo in 2010, China’s Geely is now securing full ownership of Lotus -- the maker of Exige, Evora, Elise and 3-Eleven. The Chinese car company will be taking a 51% stake in Lotus from Proton as well as a 49.9% stake from DRB-Hicom, Proton’s parent company in Malaysia. Based on the agreement, Geely will have full control of the British sports car company since it will be purchasing the Malaysian-based conglomerate’s entire 51% stake.
Geely, owner of Sweden’s Volvo Car Group and London Taxi Company has promised to boost Lotus’ full potentials by increasing the development of its new products and technologies. The British sports car maker, as we know, has been merely updating its older models recently.
Since 2014, Lotus Chief Executive Jean-Marc Gales has been doing the best he could to revive the company after two decades of unstable profit. Not known to many, Lotus was completely banned in the US market after failing to meet the latest safety regulations of its airbags in 2015. It was only in the previous summer that Lotus products were once again allowed to be sold in the US.
Under the new ownership, Lotus will have access to better resources for them to develop a whole new model range. Likewise, Geely’s full control of the company will open more opportunities for collaboration--- especially in improving the performance of some Volvo models. The Swedish car brand could also produce more cars with better styling cues if Polestar and Lotus will work together.
As for Proton, the car company has been struggling enough, given that two of its factories in Malaysia have been producing less than the expected number of units. The number of cars it produces is significantly lower than the plant’s maximum capacity per year, which is up to 400,000. At any rate, Proton hopes to see a brighter future after Geely takes the company under its wings.
For one, the stake in Proton will provide Geely the access to reclaim its market share particularly in South East Asia. That said, the Chinese firm will have to use Volvo technologies with its new products in order to achieve more profit. The market for right hand drive vehicles is seen to increase especially in Australia, India, Malaysia and in the UK as a result of the new acquisition.
Other than Geely, Japanese multinational corporation (Suzuki) and French multinational firm (PSA Group) have both shown interest in acquiring the British marque. In any case, the deal signing between Zhejiang Geely Holding and Lotus Cars will be taking place this July.