China's Geely Purchases Lotus, Plans to Restore the Brand's Lost Luster

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • DEUSVULTbuddy DEUSVULTbuddy on May 24, 2017

    Hopefully Geely can get Lotus back on track and much better than before. If they can get Volvo running again, so can Lotus.

  • MRF 95 T-Bird MRF 95 T-Bird on May 24, 2017

    Maybe Saab could be next. Will Volvos now be offered with Lotus Tuned suspension that was on some Isuzu models? Volvos new turbo modular engines ought to be a good fit for Lotus.

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  • Scott So they are losing hundreds of millions of dollars and they are promising us a “Cheaper EV”? I wonder how that will look and feel? They killed the Fiesta because they claimed that they couldn’t make a profit on them and when I bought the first one in late 2010 they couldn’t deliver the accessories I wanted for it! Then I bought a 2016 Fiesta ST and again couldn’t get the accessories for it I wanted. They claimed that the components were going to be available, eventually. So they lost on that one as well! I don’t care about what they say anymore. I’ve moved on to another brand.
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  • Michael S6 What is the metric conversion between one million barrels and the number of votes he expects to buy.
  • NJRide This could give Infiniti dealers an extra product maybe make it a sub brand
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