[blackwasp]

After acquiring a 51% stake in Lotus, Geely plans to invest US$ 1.9 billion in the British brand. A media report indicates that the Chinese company is also keen to acquire more stake in the Lotus.

Geely chairman Li Shufu plans to use this expansion as a part of a strategy to make his group compete with Toyota and the Volkswagen Group worldwide. The report indicates that the first phase would involve expansion of the Hethel plant and hiring 200 engineers. At a later stage, a second Lotus factory would be setup in the UK along with a new design and innovation center in a separate location. It is believed that the second factory could come up in UK's West Midlands region while the innovation center could be setup in Coventry.

Last year, Geely acquired a majority stake in Lotus and 49.9% shares of Proton. The company is now rumoured to be in talks with its Malaysian partner Etika Automotive Sdn Bhd., which holds the rest of the stake in Lotus, for increasing its share. Geely also acquired Volvo in 2010 and has put in more than US$ 11 billion for its revamp. Li Shufu also owns around 10% stake in Daimler AG, becoming the company’s biggest single shareholder.



Source: Bloomberg

Link to the Team-BHP News

[reihem]

If they can do to Lotus what they did to Volvo, its a win win for everyone !

[A M]

Geely chairman Li Shufu plans to use this expansion as a part of a strategy to make his group compete with Toyota and the Volkswagen Group worldwide.

In order to compete with Toyota and VW, Mr. Shufu will need to build a mass market brand which sells worldwide to generate volumes. Lotus is a very niche player and Proton is mostly unheard of in most markets i.e. it sells in very very small numbers. I don't know what strategy Mr. Shufu has in his mind.

I think Hyundai (along with KIA and Genesis) is in a better position to challenge VW and Toyota in the global market.