Future of Lotus in question after sale of Proton

The Malaysian government yesterday sold a majority stake in Proton, the owner of Lotus, for a whopping 1.29 billion ringgit (US$413 million).

The sale by Khazanah Nasional was to distributor and importer DRB-Hicom and the deal is expected to be finalised by June. But it raises concerns over Lotus, as Proton has struggled in recent years.

DRB-Hicom's priority is to make Proton profitable, which is a fair task given that Malaysia is the only country to take Proton's cars en masse. A high rate of taxes on other brands is what keeps Proton afloat, as buyers are swayed by an affordable alternative. But this business model is artificial.

The problem is outside of Malaysia, Proton hasn't done too well. In a statement DRB-Hicom’s Group Managing Director Dato’ Sri Haji Mohd Khamil Jamil said, “the utmost priority for DRB-Hicom at this juncture is to put into action and realise the workable business model for Proton”.

The company does have expertise in auto manufacture, given that it builds and distributes Volkswagens and Mercedes-Benzes. But if Proton is needing care and attention, where does that leave Lotus?

Lotus released a statement today saying, "As far as we are aware, this situation changes nothing for Lotus, Proton's support in our development remains very strong and our focus, as always, is on the delivery of the business plan."

Here's hoping funding will continue to be given to Lotus and not diverted away from the classic British marque.

 

I fell in love with the new models presented in form of concept cars, in special with the Elite. It would be a shame not to see them in the future.

 

This would be a shame. I love the Elise and Exige, the new models are ok but unlike those two the best. Hope they continue.

 

Sell it to TATA.

 

That would be fine by me. They are doing good things with Aston.

 

You mean Jaguar?

 

TATA should buy it.

 

i would like to say "i told you so" to the fools at proton. they screwed up lotus and will pay for it dearly. someone like tata should buy out lotus for sure. they have more respect for what the brand stands for and resources to execute it right.