Geely purchased Volvo from Ford in 2010, while Proton has owned the majority share in Lotus since 1996. The Malaysian manufacturer has been losing money for some time but the 49.9% stake that Geely is buying, effectively taking control of the firm, could prove a major boost, giving Proton access to up-to-date powertrains. The Chinese, meanwhile, will benefit from an increased presence in the south-east Asian market.
As part of the deal, Geely will acquire a 51% majority stake in Lotus, with Proton parent DRB-Hicom looking to sell off its remaining interest in the sports car firm. Lotus has been making significant progress in recent times but needs to expand – UK registrations were down nine per cent in 2016.
The deal is still subject to regulatory approval and is expected to be completed in July, possibly frustrating PSA Group which had previously been believed to be the most likely bidder for Proton.
Industry observers generally believe the Geely takeover is positive news for Lotus, giving the sports car manufacturer access to the funding and investment that has already proven a major success for Volvo.
A new version of the core Lotus Elise model is expected in 2020, and the new ownership could also see a revival of the company’s previously mooted SUV programme.
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