Proton investors pressuring the company to sell Lotus

Article by Christian A., on December 28, 2011

Investors of Malaysia's Proton Holdings Bhd. are pressuring the company to sell off British sports-car maker Lotus. Since Proton took control of Lotus in 1996, no profit has been made from Lotus. It’s not likely to make profit until at least 2014. With the possibility that Proton would be divested by its parent (which is run by the state), investors like Gan Eng Peng believe that it’s time for Lotus Group International Ltd. to be sold.

Gan, who helps manage around $3.6 billion as head of equities at HwangDBS Investment Management Bhd. in Kuala Lumpur, said, “It will make sense for them to sell it." He said that Proton and Lotus are in different market segments whether you consider the geography or the product and so they “are not a good fit.”

Lotus, which has been a weak rival against Porsche AG and Ferrari S.p.A. in Europe, is barely able to stay relevant in this industry due to its long-term expertise in designing lightweight frames. But Gan believes that Lotus will need the support of an automaker that’s more global than Proton so that it could survive in this industry.

There were already speculations in the past about the sale of Lotus. Earlier this month, Shanghai Automotive Industry Corp. (China's largest carmaker) denied a report that it is interested in Lotus. Just a couple of months ago, it was reported that Proton will sell its stake in Lotus to Genii Capital. However, Proton has denied this. [source: Autonews]

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