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In a deal eclipsing $410 million, DRB-Hicom purchased a 43 percent stake in Proton, a Malaysian automaker better known for its ownership of the famous British sports car brand, Lotus.
Originally, the stake belonged to Malaysia’s state-owned Khazanah Nasional Bhd. However, as Proton has not made a profit in the last two years, multiple prospective buyers stepped in for acquisition talks before the controlling stake was finally approved for DRB-Hicom, a large conglomerate with a hand in automotive services, transport, and power generation.
This investment effectively hands DRB-Hicom the control of two Malaysian car plants that are capable of producing a combined 350,000 vehicles a year. This production number may increase in the future as General Motors just reached out to Proton last month about a possible manufacturing joint venture in Malaysia so that GM could gain better access into the Southeast Asian market. The talks are not yet complete and it will be interesting to see what effects DRB-Hicom will have in the discussions.
What’s more, DRB-Hicom is also the new private owner of Lotus. Unfortunately, this change puts the future of Lotus into question. Lotus has not been able to make a profit for Proton since 1996, an equities investor suggested that all or part of Lotus would likely be sold. Among those interested in Lotus is Genii Capital, a part owner of Lotus Renault GP.
Lotus, a company best known for producing great sports cars like the Elise and the iconic Esprit, is about to head into a whole new direction.
While it will continue building sports cars, Lotus CEO Dany Bahar has announced that in October, 2013 the company will produce its City Car, which was shown as a concept at the recent Paris Auto Show.
This new car will be jointly developed by Lotus and its parent company Proton, along with a mystery OEM car company. Bahar went on to say that “We will build three versions: one for the Asian market, one for Europe and a sporty one.”
No exact specification details are known at the moment, however the City Car concept had a 1.2-liter, 3-cylinder engine with hybrid drive technology.
While Lotus will continue its sports cars side of the business, which in the next few years will launch models like the all new Elise, Elan and Esprit, Bahar said that in order for the company to become profitable, it needs to expand its business portfolio.
Bahar told CAR magazine that “Over the past 15 years, Proton has had no profit at all from Lotus. They decided to sell it or give it another chance.”
Let’s hope their new business plan works and enable them to stay in the business of making exciting cars for years to come.
First up is the Lekir, which is essentially a Lotus Europa dressed up in re-altered clothes. Lotus (which is owned by Proton) had recently discontinued production of the unloved Europa in favor of the new Evora, so it can easily start building its old model for its parent company. This will allow Lotus to sell more vehicles and will in return bring in some much needed enthusiasts to Proton dealers. Also, since Proton has a much larger international distribution network, the Europa could finally see the success it never had.
When the Lekir hits the showroom, it will feature either a 1.6-liter pr 2.0-liter turbo charged four-cylinder engine, the latter producing about 220-hp.