KUALA LUMPUR – Geely Holding Group and Malaysia’s DRB-HICOM Berhad signed a final contract on June 23 here for the acquisition of 49.9 percent shares of Proton and 51 percent of Lotus.
The contract signing comes a month after the two companies reached a binding heads of agreement for the acquisition on May 24 and after three years of on and off discussions.
The acquisition is expected to be completed in three months, after which Geely will form a core management team recruited from a pool of global candidates to ensure the smooth operation of Proton.
One of the first products that Geely will bring to Proton for local production will be its hot-selling Boyue SUV, according to Geely Chairman Li Shufu at the signing ceremony.
“As an iconic national brand, Proton epitomizes the spirit of Malaysia. Our partnership with DRB-HICOM will enable Proton to become the industry leader in Malaysia and a top three brand in Southeast Asia,” said Li. “We will also continue to expand Lotus’ product portfolio and increase production to further enhance its brand. Furthermore, the deep regional knowledge we gain from Proton and Lotus through this transformative partnership, coupled with our technological expertise and leadership in innovation, opens the door for Geely to become a major player in the ASEAN market and will help us reach our sales target of three million units by 2020. We will work together to make the most of our respective strengths to ensure a bright and sustainable future for both brands based on mutual respect and trust.”
“Geely which also owns Sweden’s Volvo Cars, London Taxi Company, LYNK & CO and the Geely Auto portfolio of car brands is the right partner for Proton,” said Dato’ Sri Syed Faisal, managing director of DRB-HICOM. “Their success with Volvo and London Taxi Co., and of course with their own Geely Auto brands demonstrates their capabilities both as a bonafide carmaker and as a partner. With Geely making Proton their right hand-drive hub for the ASEAN region, Proton can now target the immense ASEAN passenger car market for both our existing models and Geely’s models. Proton’s status as Malaysia’s national car is secure, and DRB-HICOM remains a majority shareholder. Proton will now focus their efforts with Geely on gaining domestic market share. Taking advantage of the joint capabilities of both companies, I am positive that we will be able to impact the market positively, by coming out with products that satisfy market preferences in terms of design and quality.”
Proton, established in 1983, is a wholly-owned subsidiary of DRB, Malaysia’s largest automobile manufacturer, and the only full-fledged OEM car manufacturer in Southeast Asia. It has operations in the UK, the Middle East, and across Southeast Asia and Australia. The Lotus car – with its British heritage and engineering expertise – has been a world renowned brand, recognized for its innovation and performance. Geely will likely make efforts to enhance the market competitiveness of both brands and foster their revival.