Lotus could be up for grabs in sale of unprofitable parent Proton

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2016 Lotus Exige Sport 350

2016 Lotus Exige Sport 350

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Ownership of Lotus could soon change hands if the sale of its unprofitable parent company Proton goes ahead.

A controlling stake in Proton was bought by DRB-Hicom in 2012 for approximately $410 million but the Malaysian conglomerate has struggled to turn the automaker around and recently reached out to more than a dozen firms about the potential sale of a stake.

PSA Group, the maker of Citroën, DS and Peugeot cars, has confirmed to Reuters that it has responded to DRB. People familiar with the matter also told Reuters that Renault and Suzuki have responded to DRB as well. The people also said that DRB is open to considering a sale of Lotus.

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Proton logo

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Lotus is in the midst of its own turnaround and within the year could turn in its first profit in its 65-year history, according to CEO Jean-Marc Gales.

DRB doesn't release financial statements for Proton but said its pre-tax loss of approximately $198 million was due mostly to losses from Proton. The Malaysian government also supported Proton as recently as April with a $365 million injection of funds, though it warned the automaker’s operations weren’t sustainable and that a strategic foreign partner was needed.

A potential boon for a foreign automaker is Proton’s two Malaysian plants which have a combined annual capacity of 400,000 cars. Proton also has a footprint in the growing Southeast Asian market, though it hasn’t enjoyed much success outside of its home market and even there sales are declining due to inferior products and poor after-sales service. Last year Proton sold just 102,000 cars.

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