Geely, PSA Vying for Stake in Lotus and Parent Company Proton
- Author: Zachary Reyes Feb 23, 2017,
Feb 23, 2017, 5:58
Geely, the Chinese automaker that owns Volvo, and PSA Group, which owns Peugeot and Citroën, have both submitted offers for a piece of Malaysian automaker Proton.
Full details of Geely's bid are yet to be revealed, though it is believed part of the offer to Proton's current owner DRB-Hicom will include access to Geely's latest vehicle technologies to help boost the profile of struggling Proton.
Geely already owns Swedish brand Volvo.
The automaker needs to bring in a foreign partner to help in research and development as part of conditions it agreed to in order to get a RM1.25bil loan previous year.
Other potential bidders have included Peugeot maker PSA, Japan's Suzuki and French auto maker Renault. At the time, PSA confirmed it had responded to DRB-Hicom. It has said it expects to announce a decision in the first half of this year.
"We are evaluating the bids received".
DRB-Hicom, which in 2012 paid $410 million for a controlling stake in Proton, the parent company of Lotus, has been attempting to sell its stake since at least last fall.
Geely is believed to be looking at taking a 51 percent stake in Proton Holdings, and with Proton representing a higher potential sales volume than Lotus alone PSA could become engaged in a bidding war with Geely for control of Proton Holdings. Geely declined to comment. "And for PSA, which is strong in sport-utility vehicles, it is not keen on Lotus".
According to Automotive News, past year both GC9 and Boyue SUV helped the Chinese car-maker increase sales in China by 50 per cent to 765,851. Proton has racked up considerable debt while its sales have declined, though Lotus has been making slow progress thanks in part to an updated Evora sports auto.
For Geely, a significant partnership with Proton would give the Chinese firm entry into the global (RHD) market. Acquiring Proton would provide PSA with production facilities and a sales network in the Southeast Asian market.