Malaysia-based Proton Holdings is said to be seriously considering the sale of its Lotus sports car division. Proton purchased Lotus in 1996 but has never made a profit on the British brand.
Proton’s main car business is producing sedans and taxis for its home market, which is clearly a diversion from Lotus’ Ferrari-rivaling aspirations. As such, Proton could be looking to sell Lotus to focus more on its core business.
“It will make sense for them to sell it,” said Gan Eng Peng, head of equities at HwangDBS Investment Management Bhd. in Kuala Lumpur. “Proton and Lotus are not a good fit. They are in different market segments, both in terms of geography and product.”
Lotus has long been a niche automaker, but is trying to break out of that mold with a number of new products, including a sporty sedan and a tiny city car. However, many doubt that the small automaker will be able to come up with the cash to fund its future plans, which could stand as another reason for the sale.
Previous reports have suggested that China-based Shanghai Automotive Industry Corp. and Luxembourg-based Genii Capital have shown interest in purchasing Lotus, but both firms have denied those rumors.
It’s estimated that Lotus needs to sell about 8,000 vehicles annually to turn a profit. Last year the company sold 1,985 units.
References
1.’Lotus Sale Seen…’ view
