Economy

Geely expects high of Proton and Lotus after acquisition

Geely expects high of Proton and Lotus after acquisition”

The deal involves a cash injection by Geely worth RM170.3 million and a RM290 million on the implied value for the Geely Boyue model, which was earlier reported to be the first Proton SUV model from the collaboration.

The company agreed in May to buy 49.9 percent of Proton and 51 percent of British sports vehicle brand Lotus, which was owned by the Malaysian automaker.

DRB-Hicom and Geely inked a definitive agreement for the partnership here today.

Proton had acquired the British marque in 1996 and many of its cars benefited from tuning by Lotus.

Malaysian Prime Minister Najib Razak stands on stage waiting for a signing ceremony between Proton and Geely in Kuala Lumpur, Malaysia, Friday, June 23, 2017.

"I can not give you a definitive timeline now, but rest assured we have a good, solid plan that we will put in place soon, and we will announce it in more detail in due course". Proton will rebadge, manufacture, sell, market and distribute Geely models in Malaysia and Southeast Asia.

Najib said there were also those who asked why Proton was being helped when it was a private entity. Chairman Li Shufu said the partnership with DRB-HICOM Bhd would bring good business opportunities for both companies, while taking the Proton and Lotus brands to a higher level.

"Their success with Volvo and London Taxi Company, and of course with their own Geely Auto brands demonstrates their capabilities both as a bona fide carmaker and as a partner".

"This is the beginning of a new era for Proton. we want to expand its footprint in the region", he added.

It was reported that the government extended its line of credit amounting to RM1.7 billion on top of a RM1.2 billion soft loan previous year, to support mounting operational costs and lacklustre sales.

Li said the priority will be to make Proton and Lotus profitable and to sustain growth while embracing new technological trends of electrification, lightweighting and artificial intelligence.

A binding condition for the Malaysian government to grant credit to Proton is to seek a foreign strategic partner (FSP).

Najib did not name the individual but he was believed to be referring to former prime minister and Proton's founder Dr Mahathir Mohamad who has lashed out at the government for selling the national carmaker to a China-based automobile giant.



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