Team-BHP - Proton & Lotus up for sale

Long story short, two companies under the same umbrella are up for sale. Owned by DRB_HICOM who mainly dealt with assembly and sales operations before buying into Proton. They have been struggling of late with both funds, model line up, technology etc....and desperately need a rich Auto firm with engineering expertise to preferably take over.

Everyone on this forum know Lotus already. Engineering genius Colin Chapman's brainchild the iconic brand has been synonymous with well engineered, lightweight, superbly handling cars made by an operation that never really knew how to make money. The model line up is really old and desperately needs investments for a revamp. They still have engineering expertise relied on by many manufacturers but has recently suffered from brain drain as quality personnel have moved to greener pastures.

Proton is Malayasia's national car brand. It's an operation that started out like Maruti and ended up like Tata! (no offence intended). Once upon a time had a monopoly in the lucrative Malaysian car market until the market opened up and tougher competition came in. Their product line up till late suffered from quality and reliability issues. Off late they have sourced models from Mitsubishi and Honda and rebranded them after facelifts. That said Proton has decent global presence albeit with sales nothing to write home about. It is still a major player in SE Asia and has large manufacturing facilities and still enjoys Government support.

The Govt. has promised a soft loan in very friendly terms provided it finds another saviour parent company. Interesting to note Tata are already associated with DRB Hicom for commercial vehicles. It's well known that both Tata and Mahindra have been trying to establish themselves in the SE Asian market for years now. Proton could be the perfect trump card if used well. In bonus it has a decent International sales and service presence, plus throw in Lotus as well.

There you go I have sparked the rumours.....

Source: http://asia.nikkei.com/Business/AC/D...s-national-car

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Originally Posted by shortbread (Post 4069381)

I think you have summed it up well. Maruti could have ended up as a more reliable Tata if the governement had not divested its majority share.

Proton cars were good initially. Mitsubishi was a strong partner but that went downhill. The cars never progressed. The orginal founder died in a helicopter accident. DRB-HiCom never had the vision. Various suitors were rebuffed due to assymetric terms. Lotus was acquired in order to provide an R&D base. It was never leveraged.

My bets are that Lotus will be sold off. Either a Lotus management buyout + private equity buy out or maybe JLR might take it. Proton might be divested but is the Malaysian market attractive enough? Thailand has a full fledged automobile industry but runs on 50% capacity. Only pick ups sell and they make more money exporting sub-assemblies to us.

Proton must just get scaled down and become a badge engineered assembly unit. Might be attractive to Suzuki or VW who want a market without too much investment

Proton & Lotus up for sale-maa2015salesdata0121200x2122.jpg

To arrest this alarming downslide, Proton finally decided "to do a Perodua" by churning out badge-engineered Suzukis. Suzuki even declared that they were performing a "strategic withdrawal" from the Malaysian market in order to make the deal with Proton work. Suzuki dealers in Malaysian were also asked to switch over to Proton:

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Following Proton’s announcement of a strategic partnership with Suzuki, the Japanese manufacturer has finally announced its consolidation with Proton. With that, all sales of Suzuki cars have been ceased, with all 29 Suzuki dealerships in Malaysia converted into Proton Edar outlets. The announcement was made during the signing ceremony to appoint former Suzuki dealers as new Proton dealers earlier today.

http://autobuzz.my/2016/01/wipsuzuki...s-with-proton/

I wonder what will happen to the deal with Suzuki if Proton is acquired by some other automobile company? To pre-empt such a scenario, Suzuki could decide to invest in / take over Proton themselves, but will Osamu Suzuki see value in such a deal??? :confused:

Quote:

Originally Posted by RSR (Post 4070352)

This does come as a huge surprise!

Proton, of course, is on a continuous downslide. At one point of time, Proton had a near monopolistic ~ 74% marketshare in Malaysia. Last year, this shrunk to ~ 17% in their home market, less than half of that of Perodua (who primarily churn out badge-engineered Toyotas & Daihatsus):

To arrest this alarming downslide, Proton finally decided "to do a Perodua" by churning out badge-engineered Suzukis. Suzuki even declared that they were performing a "strategic withdrawal" from the Malaysian market in order to make the deal with Proton work. Suzuki dealers in Malaysian were also asked to switch over to Proton:

I wonder what will happen to the deal with Suzuki if Proton is acquired by some other automobile company? To pre-empt such a scenario, Suzuki could decide to invest in / take over Proton themselves, but will Osamu Suzuki see value in such a deal??? :confused:

I think a manufacturer like Tata or Mahindra could really benefit from signing up with Proton. One of their biggest drawbacks is that Proton has no SUVs, MUVs, pickups and also lacks diesel expertise - All this is a huge drawback in the SE Market. This is what the two Indian giants are good at. Making use of spare Proton capacity to assemble badge engineered Hexas or XUVs would simply multiply volumes for the Indian makers. Tata have ready small car replacements for Suzuki models in the Tiago and Bolt.

Also Proton has a couple of decent mid to large size sedans in their line up that could be introduced in India.

I know its highly unlikely to happen with either Suzuki or one of the french makers poised to take over Proton, but I do think there's a lot of potential there for the right buyer!

It looks like Proton will join hands with either the Chinese or the French. Geely (which owns Volvo Cars) is said to be leading the race, followed by Peugeot-Citroën, and finally Renault:

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Proton began the process of identifying its strategic partner in June 2016 by sending out a request for proposal to 14 original equipment manufacturers (OEMs).

Out of these 14 OEMs, three foreign parties have since been shortlisted. It is understood that the three parties are China’s Geely as well as French carmakers PSA Group and Renault SA.

Quote:

Originally Posted by RSR (Post 4139797)

They have been doing this for years. They nearly inked a deal with VW but fell out due to unreasonable terms and conditions. I think the Malaysians want to control everything

Proton to be acquired by China’s Geely; deal includes purchase of 49% stake plus takeover of Lotus.

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After more than a year of speculation, it has emerged that Geely has agreed to purchase a 49% stake in Proton. Geely will also take a majority stake in Lotus of between 50% to 75% as part of the deal,

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Geely is said to be looking to take advantage of the British sports car maker’s expertise in lightweight technology and composite materials, in order to help it meet strict emissions targets in China.

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