Lotus Might One Day Build its Cars in China

Prime Minister Datuk Seri Najib Razak at the DRB-HICOM Berhad and Zhejiang Geely Holding Group at Grand Hyatt Kuala Lumpur. Pix by Asyraf Hamzah

"Whatever spending [we will make] will depend on what Proton will be, in terms of its long-term product planning [such as which market segments the company will enter]".

"With Zhejiang Geely Holding Group on board, Proton can now eye the huge Southeast Asian passenger auto market with renewed confidence", he said at the signing ceremony of the deal, which was attended by Malaysian Prime Minister Najib Razak and Zhejiang Geely Holding Group chairman Li Shufu.

"Proton's status as Malaysia's national vehicle is secure, and DRB-Hicom remains a majority shareholder".

The total consideration for the disposal of a 49.9% stake in DRB-Hicom Bhd's automotive arm Proton Holdings Bhd to China's Zhejiang Geely Holding Group Co Ltd is RM460.3 million. "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".

When attending the signing ceremony, Malaysian Prime Minister Najib Razk said Proton only sold 72,000 units in 2016, giving it barely 12 percent of the Malaysian market. As a result, the deal also saw Geely adopt a 51 percent majority stake in Lotus, leaving the Chinese company in charge of the relatively small British manufacturer's operations. 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.

"The revival of Proton and Lotus will not be an easy task in a market with fierce competition".

Under the partnership, Syed Faisal said Proton will become the manufacturing hub for Geely's right-hand drive models. The government has long resisted efforts to sell off any key stake in Proton, seen as a national icon.

In expressing his confidence, Najib said, Proton would have the ability and resources to turn itself around and become an example of Malaysian success, without needing handouts from the government.

DRB-Hicom Group managing director, Dato' Sri Syed Faisal Albar, said the signing was a historic moment for Proton, as the national carmaker moves to make inroads into the large ASEAN automotive market. The government will also supply the carmaker with the remaining 250 million ringgit of a 1.5 billion ringgit soft loan extended a year ago.

Malaysia wants Proton to win back lost market share and get a stronger foothold in the region's 3.2-million-car market.

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