China's Geely Purchases Lotus, Plans to Restore the Brand's Lost Luster
China’s Zhejiang Geely Holding Group Company has decided to purchase a 49.9 percent stake in Proton from Malaysian conglomerate DRB-Hicom and a majority share of the United Kingdom’s Lotus Cars.
Geely seems to have an affinity for other manufacturers and eclectic tastes — not just because it has received criticism for modeling its own cars after everything from Roll-Royce to Toyota, but because it also purchased Volvo Cars and the London Taxi Company. This could be extremely good news for Lotus, which always seems to be in a bit of a bind. Whether or not you like the idea of a Chinese company owning distinctively European brands, Geely helped Volvo come back from the brink and has committed to doing the same for Lotus.
“Reflecting our experience accumulated through Volvo Car’s revitalization, we also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies,” stated the company in its official announcement.
Considering we’ve seen the same lineup from Lotus for what seems like a lifetime, this is exciting news. Everyone likes the Elise, but it’s time to move on after 16 years.
Presumably, Geely’s strategy with the sports car brand will mimic its dealings with Volvo Cars by not being obtrusive. The Chinese company essentially gave the Swedish automaker a wad of cash and told them to keep up the good work. This has resulted in some of the best-received Volvos in recent history and increasing annual sales volume since 2014. If Lotus receives similar supportive parenting and the tools to succeed, there is no telling what it might come out with.
However, what’s good for the goose is also good for the gander. Geely owner Li Shufu has made his intention to own an exceptionally diverse roundup of automakers well known. Owning Lotus ads a performance brand to the mix and ads a level of prestige to the company. There are also opportunities to collaborate with Lotus on Geely models sold within China, which have already seen massive sales gains this year. April deliveries for the core brand were up 94 percent over 2016, and that wasn’t even its best month of 2017.
Geely is also expected to provide Proton with modern vehicle technologies co-developed with Volvo. Investing in the brand could also help it rebound from the sizable losses it has suffered on the global market in recent years. Sources speaking to Automotive News stated the Hong Kong holding company wants to bolster Proton sales in Malaysia, the U.K., India and Australia.
Tian Yongqiu, an independent auto consultant, explained this is all part of Zhejiang Geely’s master plan for world domination — a plan that seems to be in its final phases.
“Geely has almost finished the puzzle for the global market: It has presence in Europe through Volvo, which can also go to the U.S. It must fill in the blank by breaking into Southeast Asia, which is dominated by Japanese small cars,” Tian said. “It’s hard for Geely to break into this market on its own. But with Proton’s factory and massive network, it can be a short cut.”
Geely claims the deal is subject to regulatory approval and the signing of a definitive agreement, but expects acquisitions to be finalized in July.
[Image: Lotus Group]
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