By on December 27, 2011

Lotus is one of those brands that every auto enthusiast loved to lionize, despite (or possibly because of) the fact that it hasn’t made a profit for its owner, Proton, in 15 years. But now things are changing. Lotus itself is in the midst of a makeover, seeking to transition from niche sports- and track-car company to a Ferrari and Porsche-rivaling aspirational brand. Meanwhile, back in Malaysia, its owner, Proton, is undergoing a few changes itself. Having been founded as a state-backed business, Proton may soon be privatized, reports Bloomberg. And as a result, Protons private investors could push for a quick divestment of the firm’s Lotus holdings. One such investor, Gan Eng Peng of HwangDBS Investment Management, tells Bloomberg

It will make sense for them to sell it. Proton and Lotus are not a good fit. They are in different market segments, both in terms of geography and product.

Chinese automaker SAIC and Genii Capital have been rumored as possible buyers, although Proton denies all rumors that Lotus is for sale. The problem is that Lotus won’t be worth much until 2014, the brand’s earliest projected break-even date. And even then, Bloomberg’s analysis shows that Lotus’s highest possible value then still wouldn’t be enough to return Proton to profitability, in light of increased competition in its home market of Malaysia. But in the meantime, Proton has no (useful) synergies with Lotus, and as the automaker emerges from the warm embrace of government ownership into the harsh light of the global market, it seems that selling off Lotus may be unavoidable.

Which leads to an interesting question: which automaker seems most likely to buy up Lotus? My money is on VW, who might buy the brand for no other reason than to kill off Alfa, after Fiat refused to sell. Of course, then it might create branding challenges with Porsche, but Alfa would have done so anyway. Another possible buyer: Toyota, which supplied Lotus with engines for years. In any case, we can probably count GM out of the picture, after their abortive relationship with the British brand.

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19 Comments on “Lotus Investors: Sell! Sell! Sell!...”

  • avatar

    Lotus doesn’t bring VW or any other major manufacturer very much. If anything, Lotus would likely be bought by a consortium of rich Arabs and Lotus enthusiasts with lots of money to blow on a complete waste of time. Does the world really need another supercar?

    • 0 avatar

      Lotus’ engineering consultancy has been a profit center for the company in the past; I don’t know if that is still the case. That aside, I agree – the company is a Saab-like black hole for money with a very limited upside.

  • avatar

    Proton up to now have been not much more than a government Malaysian national pride program. They mainly bought the rights to late model Mitsubishi’s and sold them as their own so Malaysia could have a national car company. If they are going private then Lotus makes absolutely no sense at all and is sure to be up for sale.

  • avatar
    Rod Panhard

    Konigsegg. Lotus would add some legitimacy to the company.

  • avatar

    Honda. Since Honda can’t seem to navigate themselves back to the building blocks that built their company, they could buy the company that today just might be the best representation of Honda’s original values.

    • 0 avatar

      It could make sense for someone who is the largest manufacturer of engines who makes no sports-cars, to buy a company that doesn’t make their own engines(from scratch at least) but true sports-cars. I completely disagree with there ever being any other connection between the twos values though. Honda still builds the same cars they always did, it’s just that everyone else caught up with them…

      • 0 avatar

        “Honda still builds the same cars they always did…”

        No, no they don’t. No more double-wishbone front suspensions or over-engineered engines. Their mission changed after old man Sochiro died. The stated mission was,at first, to become a ‘green’ car company; later it devolved into becoming a volume car company in competition with Toyota in the American market.

        The original Honda Motor Company was indeed a MOTOR company. Now it’s just a car company. Oh, and no I’m not a fanboi – my last Honda was an Acura in 1997.

      • 0 avatar

        Ok, I admit they have given up on some details that proved to expensive to build, compared to how many people who cared to pay for it. They haven’t fallen as deep as for instance Porsche, but, their position in the market has dropped a lot after everyone else started making decent cars. Honda really built a reputation back when the British and US were building pure crap, and other Japanese makers didn’t understand anything but reliability (sacrificing stuff like design, fun, and ergonomics) If they were to get anywhere near where they used to be, they would have to go against BMW, and that ain’t going to happen unless they ditch the fwd lineup. You may be right about the death of Sochiro caused them to more or less give up their goals, but they still refuse to build a v8 for the ridgeline, or a v6 for the CR-V, which would give them an edge in the market against Toyota, although their customers (or , the people who choose otherwise) obviously want to pollute more.
        Still, they never had the idea, like Colin Chapman, that the only thing that matters is having the lightest car possible, even if it kills the driver…

  • avatar

    How about Youngman in China? They already have Lotus in their name in China. Lotus sells their cars in China as “Lotus NYO”.

    GM owned them. Didn’t work out.
    Proton owns them. May dump them.

    “Gan Eng Peng of HwangDBS Investment Management, tells Bloomberg

    It will make sense for them to sell it. Proton and Lotus are not a good fit. They are in different market segments, both in terms of geography and product.”

    Ya think?

  • avatar

    Lotus being pitched as a “Aspirational” brand makes it a hard sell to any of the major production players in the industry. It would make as much sense for Ford to have bought the rights to the Maybach marque from MB shortly after it’s recent necromancy – in the end, nobody wins.

    Sad to say it, but I kind of hope that some idiot buys this vis-a-vis TVR so that it can quickly die a rather undignified death as a warning to other morons who ruin brands.

    The only good news is that I would not at ALL be surprised if Lotus Engineering was kept separate from the car maker, and we can see Lotus’ engineering influence long after they’ve killed the more visible brand.

  • avatar

    Victor Müller?

  • avatar

    …genii capital, until dany bahar’s VC scheme has run its course, followed by tony fernandes for pennies on the dollar…

  • avatar

    Unlike SAAB, Lotus has some unique products – there is little to compete with the Exige/Elite – pure sports cars (and not the fat rich-man semi-useless supercars).

    I would love them to focus on purebred, more affordable pure sports cars.

    How about BMW buying them and then selling them and servicing through Mini Dealerships. Then again I believe they still own the Triumph name for that…

  • avatar

    Lotus + Toyota seems like the best fit. It would have been interesting for Toyota to have consulted with them on the FT-86 (though it seems they’ve done a great job on their own). Lexus F division could def use a kick in the ass, and I see a lot of room for good synergies. Only problem is it might prevent Lotus from working with Toyota’s competitors.

    Another good buyer would be Hyundai/Kia. Lord knows they need the help in the details. Lotus could def help them hit the final 10-15% their cars need to go from being awesome on paper to actually awesome. The Veloster for example def needs the touch of a company w/experience. The 1.6 GDI should have been wilder (or bigger), the suspension should have been tuned more aggressively, the DSG should have been biased towards sport. Etc.

    I think Lotus will find a home. A lot of companies need their help.

  • avatar
    The Doctor

    The logical option would be for a company such as Ricardo to buy the engineering consultancy and for the sports car operation to be bought by a larger company.

    As a more leftfield option, how about Aston Martin to buy the lot? They need the engineering expertise that they lost following the purchase from Ford and even after Mr Bahar’s repositioning of Lotus as a Porsche-rival, there should be little overlap between the two brands.

  • avatar

    Remember how GM didn’t want to kill Buick because it might hurt the brand in China? Well, Lotus Engineering is a lot easier to market when they are closely associated with Lotus Cars.

    • 0 avatar
      The Doctor

      Not too sure about that – most of Lotus Engineering’s clients prefer to disassociate themselves with the company. From memory the last car to prominently advertise a Lotus connection was the Proton Gen-2…

  • avatar

    Yamaha can give them engines, and they can offer engine and chassis development solution together to other car companies with Lotus’ force.

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