Geely to take over Proton, Lotus

Proton joins Volvo in Geely’s growing brand collection

Geely, the Hong Kong auto company that owns Volvo, is acquiring control of British vehicle company Lotus.

Malaysian conglomerate DRB- Hicom will sell a 49.9 per cent stake in national carmaker Proton to China's Zhejiang Geely Holding Group, the companies said yesterday.

"To all Proton staff, vendors and dealers, worry no further as growth will be created".

A binding condition for the Malaysian government to grant credit to Proton is to seek a foreign strategic partner (FSP).

China-based Geely, whose domestic sales rose 50% previous year to 765,851 units, has a strong European brand in Volvo, but is weak in the ASEAN region.

The premium SUVs will be sold, leased and rented via a webs-site and pop-up retail locations, according to the brand's senior vice-president, Alain Visser, who spoke to Autocar recently.

The decision made by DRB-Hicom Bhd to partner with Zhejiang Geely Holding Group Co Ltd indicates the strong commitment from Proton Holdings Bhd towards its turnaround plan and to meet the conditions of the RM1.5 billion soft loan approved by the government in April previous year.

Geely - which also owns newcomer Lynk & Co - has pledged to boost Lotus by "expanding and accelerating the rolling out of new products and technologies".

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Proton is in something of a holding pattern in Australia as its stockpile of 2016-plated cars - built before more strict emissions standards for petrol engines were introduced late past year - dwindles.

Describing Proton as his "child", he stated that with the done deed, "Proton can no longer be national" and that any success it experiences is nothing to be proud of, as it doesn't "belong to me or my country".

DRB-Hicom was tasked by the government in April last year with finding a foreign partner capable of turning around loss-making Proton, whose domestic market share has fallen from over 70% in 1993 to 12.5% last year.

Proton, founded in 1983 by Malaysian prime minister Mahathir Mohamad, was once one of Malaysia's flagship companies. It bought Volvo from Ford in 2010, and it purchased London black cab maker Manganese Bronze out of administration in 2013.

"The total exit of Lotus from Proton would also remove one of the main challenges facing Proton in about a decade". It will also be the Chinese automaker's entrypoint into the United Kingdom market.

France's PSA Group, which makes Peugeot and Citroën cars, had also submitted a bid for Proton.

Lotus is a prestige brand, which also comes with a great deal of engineering expertise.

The agency said what Proton brought to the table was the ability to catapult the chosen foreign strategic partner with its collection of auto marques into the ASEAN market.

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