Europe’s largest automaker is considering of putting in a new bid for Malaysia’s Proton in order to tap into the growing southeast Asian market. But perhaps the more interesting story here is that Proton owns iconic British sports car maker Lotus, which could consequently put the Lotus brand under Volkswagen‘s already impressive umbrella of brands that includes likes of Bentley, Lamborghini and Bugatti.
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When sports car company Lotus had announced the end of its title sponsorship of the Lotus F1 team, a red flag was raised as concerns over Group Lotus’ financial problems surfaced. Now, new reports reveal that the troubles facing the automaker are more than meets the eye.
Earlier warning signs were brought to attention this year when Lotus’ Malaysian parent company Proton sold a controlling stake to another Malaysian conglomerate, DRB-Hicom. As per Malaysian law, Lotus had to halt all business operations and freeze its financial accounts during the 60-day transition period.
The 60-day period ended in March and now, new owner DRB-Hicom is currently conducting the due diligence of Group Lotus, investigating worrisome figures including Lotus’ $320 million in accumulated debt.
Due to the mounting concerns, rumors have spread that Lotus may be put into administration to free itself from debt and that even CEO Dany Bahar has been let go from the company. What’s more, in line with our reports earlier this year, Chinese automaker Zhejian Youngman Lotus Automobile (Youngman) is a potential buyer of the brand, placing a bid on its remaining assets, including naming rights. The official importer of Proton and Lotus cars in China, Youngman is perhaps better known for its past failed attempt to purchase the now defunct Saab.
So far, a Lotus spokesperson has denied these rumors and insisted that DRB-Hicom and Lotus executives are working to keep the business running as usual, ”There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia. Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1 to bed.”
The spokesperson adds, “It’s no secret that we are going through a very difficult time at the moment due to the change in ownership but we’re doing everything we can to get through this period and come out the other side stronger than before.”
Optimistic words, but something definitely isn’t right in the house of Lotus. Stay tuned for more information as the situation continues to develop.
Despite terminating its title sponsorship deal with Group Lotus, Lotus is committed to keeping its name in Formula 1 for the imminent feature. Confused? You should be.
Group Lotus was recently sold by Proton to Malaysian automotive corporation DRB-Hicom, causing Lotus F1′s team owner Genii Capital to end its formal relationship with Lotus. Just a week ago, we reported that Proton might be interested in acquiring Team Lotus F1, but that appears to be off the table now.
Despite the end of the Group Lotus sponsorship, Genii owner Gerard Lopez remains committed to the Lotus name. Lopez has recently agreed to a deal for title sponsorship on the F1 team, something he originally put together back in 2010, but that has been canceled and Proton’s option to buy 50 percent of the team has also been removed.
“We are happy to carry the Lotus name as we believe it is a good name for F1,” Lopez explained in a recent interview with Autosport. “We funded the team last year and the year before for whatever delta was missing. We would prefer to have sponsors up to the full amount – but if we have to fund it then we will fund it.”
Sponsorship deals that Genii had secured included Unilever and Microsoft, two companies that were arguably game changers in F1. Lopez also elaborated that buying Group Lotus isn’t entirely out of the question yet, but the organization would like to know what the new owners plan on doing with it.
For the first two races of the 2012 Formula 1 season, Team Lotus has received a mixed bag of results. Formula 1 World Champion Kimi Raikkonen finished both races in the points despite mediocre qualifying. Meanwhile, GP2 champion Romain Grosjean displayed rapid pace during qualifying but suffered a DNF for both races.
Such is the mix of fortunes in motorsports. A long and illustrious name in Formula 1, the Lotus F1 team withdrew from the series in 1994 and only returned in 2010. However, while Syed Zainal Abidin Tahir, managing director of Lotus parent company Proton, and Lotus CEO Dany Bahar are both appointed team board members, ownership of the F1 team in fact belongs to Luxembourg-based private equity firm Genii Capital. Now, between Lotus and Genii Capital, the future of the team is up for grabs.
A precarious situation, Genii Capital may even consider to buy out Lotus itself if the sports car manufacturer struggles to break through in its production car operations and continues to suffer heavy losses. To note, Lotus made a £21.4 million pre-tax loss last year while Proton’s profits have begun to show a trend of decline. In January, the Malaysian government sold its 43% controlling stake of Proton to DRB-Hicom, a Malaysian Corporation involved in the automotive manufacturing, assembly and distribution industry. Genii Capital chairman Gerard Lopez has previously exchanged with DRB-Hicom on the possibilities of selling Lotus. Lopez said,”If there is a way that we think the company can be bought and run successfully, then of course we would be interested.”
Despite the financial obstacles, Lotus and Proton remain true to their racing commitments. Lotus spent approximately £25m annually to sponsor the F1 team that bears its name and parent company Proton also supported the team an estimated £34m to satisfy debt obligations concerning secured loans with Renault and bankrupt Lithuanian bank AB Snoras. Also, more than having members on the team board, a signed call option agreement with Genii on February 3rd entitles Proton the right to purchase a 50 percent stake in the team to become majority shareholders. Proton has yet to execute the option but this may only be a matter of time.
We will learn more as the negotiations progress and as the Formula 1 season unfolds.
It’s hard out there for a sports car manufacturer, especially if it is owned by a larger company.
Over the last 17-years, Lotus has not made a profit for its parent company. That was not such a big deal since Lotus was seen as more of a high-class brand name for the Malaysian state-owned Proton. However, just earlier this year, Proton sold its 42.7% stake in Lotus to DRB-Hicom, one of the largest private companies in Malaysia. Generally, private companies are much more concerned with making a profit rather than owning a company just for its prestige.
Now word comes from Lotus CEO Dany Bahar, that the future of Lotus’ production is in jeopardy, as development for new models like the updated Esprit have been suspended. In fact, Bahar was “completely taken aback” when he learned at the Geneva Auto Show, that the entire Proton group would enter a three-month “lockdown.”
That means, only normal trading activities would be allowed, hence all future developments have been suspended. This lockdown will even effect its recently announced models like the Exige S and the Evora GTE. The new Esprit will now likely be pushed to a 2014 launch, which means the concept would be nearly five-years old when it hits the road.
That is, if DRB-Hicom even decides to keep Lotus. Rumors suggest that they will want to off-load the unprofitable Lotus brand, which means Bahar has to find a savior for Lotus very quickly.
For now, Lotus’ motor sport activities, the opening of their new showroom on Regent Street in London, and its participation at this years Goodwood Festival of Speed as the featured marque will continue. Let’s hope Lotus can survive through its current dilemma.
GALLERY: Lotus Esprit
Dany Bahar, the current CEO of Lotus is reportedly looking for a buyer to purchase the company from current Malaysian parent Proton.
Given that Proton itself was recently acquired by Malaysian conglomerate DRB-Hicom, the reason for Bahar’s strategy is probably the fact that DRB has little interest investing in a small volume specialty sports car brand, especially since Lotus hasn’t earned a profit since being originally acquired by Proton in 1996.
At present, Lotus requires funding of around £500m ($790 million) for the development of future street cars, which includes new Elan, Elise and Esprit models.
So far, no offers for purchasing Lotus have been confirmed, though some sources say that Genii Capital, the international investment firm which currently owns the Lotus Formula 1 Grand Prix team, would seem the most likely scenario, though reportedly a number of Chinese companies have also expressed interest.
[Source: Auto Express]
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.
Rumors of the sale of Lotus by its Malaysian parent company Proton have increased steadily since the appointment of CEO Dany Bahar, who has done little to dissuade the rumors. Rather than a sign of instability, Proton has committed to funding the “new Lotus”, and Bahar’s actions have helped keep the small sports car maker in the headlines.
The latest rumor mongering comes from AutoCar, which quotes Bahar as admitting, “Proton could sell Lotus.” In an interview Bahar outlines three clear paths proton could take, “Proton could keep Lotus, float it off or sell it outright.”
Far from speculating, Bahar is simply spelling out reality, commenting that, “It would be quite understandable if an owner that has invested so much wanted to see a return on its investment, especially if the buyer were a major car maker that could back Lotus for the long term.”
Any return on investment won’t happen, however, until Bahar has built Lotus into a desirable company, one that makes money and one that sells cars consumers really want to buy. At last year’s Paris Auto Show, Lotus unveiled its plan for the future, with numerous new models starting with the Esprit, which is set to launch next year.
GALLERY: Lotus Esprit Concept
The New Year may be just around the corner, but it’s never too early to spread some rumors. Proton Holdings is believed to be seriously considering the sale of their Lotus sports car division, a brand that has never made a profit for the Malaysian-based company.
Proton originally purchased the British sports car brand in 1996, but it seemed like a mismatch from the start. Proton specializes in manufacturing sedans and taxis in their home market while Lotus aspires to produce thrilling sports cars. Perhaps the goal was to have a more complete portfolio for Proton, but the lack of profits from Lotus has begun to take its toll.
Even with the new changes Lotus has been making – releasing the above City Car for example – it’s believed that the automaker won’t have the money to fund its future plans, which could be another reason for Proton to sell. There has been reports that China-based Shanghai Automotive Industry Corp. and Luxembourg-based Genii Capital were interested in purchasing Lotus, but both have denied those rumors.
Last year Lotus only sold 1,985 vehicles. It is estimated that they need to sell around 8,000 to turn a profit – yikes.
Lotus and its parent company, Proton, will be releasing their City Car to rival the new Aston Martin Cygnet and will be a production version of the Ethos concept originally seen at the Paris Auto Show. The vehicle will first be offered as a Proton, with the Lotus version coming at a later date with a higher price tag.
Lotus will be making additions to the car, hoping to make the electric vehicle offer performance not seen on any other small cars. It will be about $3,125 (£2000) cheaper than the Aston Martin Cygnet, so pricing is estimated to be around $45,300 (£29,000).
The Ethos Concept featured a 1.2L, three-cylinder Lotus Range Extender engine that had a peak torque of 177 lb-ft with a top speed of 105-mph.
GALLERY: Lotus City Car
General Motors is reviving negotiations that were scrapped back in 2007 with Lotus parent company Proton Holdings, Malaysia’s biggest auto manufacturer. Both brands are looking to form a manufacturing venture in the Southeast Asian country.
A collaboration between the two parties would probably be mutually beneficial, with GM getting access to Proton’s production in Southeast Asia while Proton would be able to take advantage of GM’s technologies to boost their exports.
Proton Holdings is a government-linked company (GLC) with the majority of its equity owned by a government-owned company named Khazanah Nasional Berhad. Ever since an unsuccessful relationship with Mitsubishi ended in 2004, the Malaysian government has been seeking a partner for Proton.
Amidst all the sexy and exciting sports cars Lotus unveiled at the Paris Auto Show last year, tucked away in a back corner was the Emas Concept. A small city car, it was perhaps the most likely of the concepts, combining the automaker’s talents for light weight vehicles with nimble handling, wrapped up in an affordable package that could produce real volume sales and bring Lotus to profitability.
Well, it seems that along with plans to move nearly all the other concepts into production, Lotus will push ahead with the Emas concept, naming it the Ethos and bringing it to market in 2014. Built in cooperation with parent company Proton, the vehicle itself will likely be built in Malaysia, with Euro-spec models receiving their finishing touches at the Lotus plant in Hethel.
Sales are expected to reach 1500 to 1800 a year for the Lotus model, a small number indeed, but one that would certainly give a big boost to overall Lotus sales. According to Lotus CEO Dany Bahar, the Ethos will be either an electric car or a hybrid. Either way, it will be a true Lotus in terms of its handling and fun-to-drive capability. Look for pricing around £30,000 – roughly $50,000.
In addition, Lotus is planning to build its own 4.8-liter V8 for the Esprit with as much as 570-hp. That same engine could also be halved to form the basis of the next Elise motor, displacing 2.4-liters.
GALLERY: Lotus Ehtos
What season of F1 would be complete without the off-track drama? The complex battle between racing teams Group Lotus and Team Lotus rages on, indicating that the previous ruling for the rights to the Lotus name didn’t end the dispute yet.
Turns out, the high court judge had given Group Lotus the go-ahead to use the Lotus roundel, the “Lotus” name, and the retro-tastic black-and-gold livery. But it hadn’t entirely ruled out Team Lotus’s involvement in the sport, and parent company 1Malaysia Racing Team can still use the name and logo “Team Lotus.” This, for Group Lotus CEO Dany Bahar, is a problem.
And as such, he is planning to appeal the ruling and eliminate the confusion: “it is inevitable that the similarity of the names Lotus and Team Lotus will cause confusion not only amongst F1 supporters and the wider public,” he said, “but also amongst F1 commentators who use the word ‘Lotus’ interchangeably for both teams.”
We hope this plays out with a clear winner on top, because what’s the plural of Lotus, anyway? Loti? Lotusesses?
Lotus impresario and well-coiffed CEO Dany Bahar has denied reports that he’s planning to divorce Lotus from its Malaysian parent company Proton—right after he mentioned that, well, he might.
During a recent interview, Bahar mentioned that he wanted to bring Lotus up to Porsche-killing standards, and in order to do so, he would have to leave Proton behind and shack up with a bigger sugar daddy, one capable of treating Lotus right. That company, he suggested, was Toyota: given Lotus’s now-tradition of using their engines, it only made sense.
But according to Bahar himself, “Proton has played, and continue to play, a crucial role in our development.” His vision for Lotus’s five-year plan includes Proton every step of the way, including Proton’s help in securing funding for Bahar’s next two-door/mid-engined/aluminum-spaceframe sedan/SUV/Cayman-killer GT/track-ready city car project.
“We have an incredibly strong relationship with Proton, they support us 100 per cent and frankly this is really important for a company like ours,” said Bahar.” Part of the business plan is the joint development of a global small car platform meaning that for the first time in the Proton Lotus history, the relationship will be mutually beneficial. This alone should demonstrate how close we are.”
Let’s hope that pre-nup’s still valid.
Lotus CEO Dany Bahar has made numerous changes to the storied British brand since he joined the company in 2009 and he’s not done yet. In a recent interview he made known his desire to see Lotus split off from its current Malaysian owner Proton, in search of a major global automaker – like Toyota.
According to Bahar, Lotus will need a partner in order to offset the cost of meeting strict new emissions ratings and crash tests. If a partner can’t be found, Lotus could look at spinning off into a private company with publicly traded stock.
Rumors of a tie-up with Toyota are only too easy to generate with both automakers sharing a long-term partnership, with Toyota supplying engines in cars like the Elise since 1994.
Bahar’s plan is to build up Lotus as a serious rival to Porsche, with total sales reaching anywhere from 6,000 to 8,000 units annually by around 2015. In order to achieve this significant growth Lotus has already unveiled its New Era plan to develop several new models including a new Elise, an Esprit and even a possible city car, among others.
According to a report by Inside Line, the company is developing a new aluminum tub to be shared across these models, which weights 220-lbs less than the 520 lb one used in the Evora.
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.
Hot on the heels of a press release from Lotus Engineering about a new lightweight vehicle study comes related news that the British sports car manufacturer will debut a new electric small car at the Paris Auto Show.
The release from Lotus states that the company has been commissioned by the Air Resources Board of California to, “undertake the second stage of a study investigating efficient, lightweight vehicles manufactured using lighter, stronger materials.” The release clearly states that the new study, “will use a mixture of materials…. including aluminum, composites, high strength lightweight steel and plastics” and that the purpose of the activity is to determine if the car (a prototype already in existence) can hold up to U.S. crash testing and safety requirements.
According to a report by AutoExpress, the prototype to which Lotus Engineering is referring is the Proton EMAS concept, which debuted at the Geneva Auto Show earlier this year. The plan, it would seem, is to build this car for Malaysia, while a 3-door version would be sold in other markets – including the U.K. and the U.S.
Power for the car will come from the 50-hp Lotus 1.2-liter Range Extender engine, which works like the one found in the Chevy Volt, delivering 30 miles of emissions free driving before the gasoline engine kicks in to charge the batteries.
Again, in the Lotus press release, the company hints that the car will debut at the Paris Auto Show alongside other rumored models like the Esprit, and two front-engined GT cars, as well as confirmed models like the Evora S and IPS.
A more production-oriented prototype model will be shown at the Paris Auto Show with the car possibly set to debut as early as 2012.
GALLERY: Proton EMAS Concept
[Source: AutoExpress and Lotus]
Malaysian automaker and Lotus Cars parent company Proton has announced the results of talks with Volkswagen and, well, there’s nothing to report. Like previous talks from several years back any planned collaboration between the two companies has been axed.
According to previous reports, a deal between the two automakers would see Proton get platforms and engines from VW to use for new models in its home market, while VW would presumably get getter access to Asian markets. It’s likely that VW’s recent stake in Suzuki has made that mostly redundant, while an ongoing Proton-Mitsubishi partnership would only have complicated the bargaining process.
Partial or full ownership would likely have given Proton a more secure future, and the same can be said for Lotus. The German automaker has done incredible things for once-nice brands like Lamborghini and it would have been exciting to see what a collaboration between Lotus and VW could have led to.
In the past few months Volkswagen has expanded to become an even larger global player, taking over Porsche and announcing a majority stake in Italdesign Giugiaro. Now Germany’s largest automaker may be looking to add yet another brand to its stable – Proton. The Malaysian automaker might not be all that familiar to audiences in North America, but we’re certain you’ve heard of its sports car division – Lotus.
During a press conference to announce the company’s return to profitability, Proton Chairman Mohamad Nadzmi Mohamad Salleh commented that the company is in talks with Volkswagen and that, “We will make an announcement in one to two weeks.”
There’s no word if Volkswagen is looking to take a part of Proton or if its just a technical partnership. VW and Proton were engaged in similar talks in the past but they fell through. A new car market with an increasing need to exploit economies of scale is likely the main reason both automakers are back in talks.
According to once source, Proton is likely looking to purchase VW platforms and engines and rebadge them for sale as Proton models overseas. Company executives have not commented on if the tie-up specifically involves the Lotus brand.
[Source: Canadian Business]
Lotus’s new CEO and Proton, the company in charge of British sports car maker, have announced their ambitions to increase the company’s profile and have it compete with exotic Italian automakers. In a recent interview Proton Holdings managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said that the launch of the new Evora model was the start of big things to come.
New Lotus CEO Dany Bahar highlighted the company’s branding potential, with its long history in motorsorts, of being an innovitve engineering company and of builing driver-oriented sorts cars. “Lotus was mentioned in the same sentence as Ferrari, Lamborghini and Maserati in the 1970s-1990s. Then, it got closed into a corner. We believe it’s the right time to bring Lotus back to where it was,” he said.
Bahar, recently joined Lotus after heading up the sales department at Ferrari, where he was also responsible for marketing and branding initiatives. Lotus is also making a big push to get back into motorsports with the recent announcement that it would return to Formula 1. At the Frankfurt Auto Show in September, Lotus also unveiled the new Evora Tye 124 endurance racer (pictured above), as well as plans to field a two-car team at the Nürburgring 24 hour race next year.
In the realm of production cars, Lotus has said it is working on a new flagship model along the lines of the Iconic Lotus Esprit, that would rival Italian exotics.