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Proton and Lotus being 'shopped around'
By Derek Fung, CARADVICE.COM.AU • 28/09/2016
Peugeot may look at Proton
Proton and Lotus, both owned by Malaysian conglomerate DRB-Hicom, are reportedly being shopped around to rival automakers.
Insider sources have told Reuters that DRB-Hicom has sent out partnership proposals to 20 automakers. So far, three companies have shown interest: Renault, Suzuki, and the PSA Group, which consists of Peugeot, Citroen and DS.
Only the PSA Group has publicly confirmed it is in discussions with DRB-Hicom. A PSA spokesman told the news wire, “Peugeot confirms it is responding to a request for proposals initiated by Proton and its shareholder”.
No one speaking on the record has detailed the specifics of the partnership proposals, although Reuters understands DRB-Hicom may be willing to give up majority control of Proton to an interested partner.
It’s not known if the partnership offer includes Lotus, which is a wholly owned subsidiary of Proton. The news agency’s sources have indicated DRB-Hicom is open to selling the British company, which not only makes lightweight sports cars, but also has an automotive engineering business. Proton has been struggling of late, with the company’s market share in its native Malaysia falling to about 15 per cent. That’s a far cry from the automaker’s peak, when it controlled around 74 per cent of the Malaysian market.
In April this year, Proton received 1.5 billion ringgit ($480m) in aid from the Malaysian Government. For the 2015 financial year, DRB-Hicom reported a pre-tax loss of around 820 million ringgit ($246m), most of which was attributed to red ink from Proton.
Proton operates two car factories in Malaysia, with a maximum combined capacity of around 400,000 vehicles per annum. In 2015, the car maker sold just over 100,000 cars.
It’s possible potential suitors will seek to exploit that spare capacity, and use Proton as a manufacturing hub for Southeast Asia.