The Chinese firm Geely buys British sports car brand Lotus along with stakes in Proton to increase its global footprint and reach in South East Asia
Geely, the Chinese company owning Volvo, has agreed to buy stakes in the Proton brand that has endured huge losses in recent times. It will be bought from its parental firm the DRB-Hicom. Geely does not stop there as it is also getting hold of 51 percent majority stakes in the famed British sports car brand, Lotus.
Moreover, DRB-Hicom will be retaining its 50.1 percent hold in Proton while looking to sell the balance stake in Lotus as well. The final agreement is believed to be penned sometime in July as Geely tries to expand its reach from a Chinese automaker to a global brand with the new purchases.
The Norwich-based Lotus has been owned the Malaysian company Proton with a major stake since 1996. The move from Geely comes after Lotus turning profits for the first time in its history in the later stages of 2016. There are several advantages to be had with the new deal as Proton will get access to the platforms and powertrains of Geely.
Mutually, Geely gets benefitted from the increased presence in the South East Asian market. An official statement from Geely read that the agreement will also help in leveraging the positives of both the firms as the synergy will include manufacturing, market presence as well as research and development.
There have been months of speculations that PSA Group would buy Proton but now it has turned the other way. Donghui Li, executive vice-president of Geely Holding Group, stated that the addition of Proton and Lotus will strengthen the global footprint for the brand and develop a beachhead in South East Asia. Geely has vowed to restore Proton to its former glory with innovative technology and management resources.
Geely was formed in China back in 1986 as a refrigerator manufacturer before starting car production in 2002. It bought Volvo from Ford in 2010 and is responsible for the Swedish company’s resounding comeback into the luxury division of the world automotive industry.