Geely Buys Stakes in Lotus and Proton
Geely, the Chinese automaker is poised to acquire a 51 percent in the British carmaker Lotus as a part of the buyout deal with the Malaysian carmaker Proton. Geely is in the process to buy a 49 percent stake in the Proton.
The Malaysian car company Proton has been struggling in the recent times, and thus, the buyout of almost half the stakes would help it stabilise itself over some time. On the other hand, Proton which hasn’t released a new car in the recent times and requires funds for financing a new version of Lotus’ Elise sportscar. The move will also help Lotus expand beyond its range of three supercars with a possible inclusion of an SUV whose development was supposed to have been stalled.
The investment into the Proton comes as a part of deals that have been signed between Malaysia and China worth billions of dollars. Since Proton is known as the pride for Malaysia, the company will keep a 50.1% stake so as to have to have the majority.
The agreement is supposed to be signed to be July according to the sources.
Since Volvo is also a part of Geely, the deal can turn out to be fruitful for Lotus as it will have access to Volvo technologies and ventures thus reducing the price for parts. With a well-established model, Geely will be able to deliver more efficiently with Lotus and also pump in more stability in the struggling Proton.
Chinese automakers are looking to enter the South-east Asian markets which promise growth, and this deal highlights Geely’s plans to look further in this market. Apart from access to Southeast Asia, this venture also gives Geely a hand in the right-hand drive market around the world, namely Malaysia, India, Australia, and Britain.