Geely to take control of Lotus

Volvo’s Chinese owner set to buy a majority stake in British brand

Geely, the owner of Volvo, is to take control of Lotus and secure a 49.9% stake in its parent firm, Malaysian car maker Proton.

The Chinese company agreed to buy the stake in the loss-making Proton from its own parent company, Drbhicom. As well as a controlling share of Proton, Geely will buy a 51% majority stake in Lotus. Drb-hicom will retain 50.1% of Proton and look to sell its remaining stake in Lotus. The deal is expected to be completed in July.

Proton has owned a majority stake in Lotus, based near Norwich, since 1996. Lotus turned a profit for the first time in its history last year. The new deal will give Proton access to Geely’s powertrains and platforms, while giving Geely increased access to the South East Asian market.

Geely said the deal will also allow synergies in research and development, manufacturing and market presence. The agreement comes following a long string of speculation, rumours and denials – the PSA Group had also been in the running to buy Proton.

Autocar understands that Geely is to adopt a similar approach in its management of Lotus as it has done with Volvo. It has been hands-off with Volvo, funding it well, supporting its growth plans and allowing the management in Sweden to implement them. The result has been a fast-growing company that’s become a true rival to the German luxury brands. Volvo is on track to sell 800,000 cars per year by 2020.

Geely is set to back the existing management at Lotus, headed by Jean-marc Gales, who has returned Lotus to profit and come up with a future model plan that includes greater commonality between its Elise, Exige and Evora sports cars. The next-generation Elise will be the first to arrive and is due in 2020.

A Geely source told Autocar: “Geely will respect the brand and provide the conditions for it to flourish, without making instant changes.”

As part of the deal, Geely Group design boss, Brit Peter Horbury, is set to have a role in overseeing Lotus design.

Donghui Li, the executive vice-president of Geely Holding Group, said: “We also aim to unleash the full potential of Lotus and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies.”