Proton takes over carmaker Lotus

By Russell Williamson

MALAYSIA'S national carmaker, Perusahaan Otomobil Nasional Berhard (Proton), has paid nearly US$84 million for 80 percent of British sports car manufacturer, Lotus.

The buyout includes the sports car division and the much- acclaimed engineering department, which has already done work for Proton.

The chairman of DRB-HICOM, group Proton's parent company, Tan Sri Yahaya Ahmad, speaking at the announcement of the deal in England earlier this month said: "We see our strong partnership in a very positive light, mutually benefiting both Lotus and Proton."

"In concluding the deal, both companies are aware that they can draw from each other's strengths and make us more competitive," he said.

Proton purchased the company from its Italian owner, Roman Artioli's, ACBN Holdings SA, who had, in turn, bought the loss- making company from General Motors in 1993.

Roman, who maintains control of the remaining 20 percent of Group Lotus, had been negotiating the sale of Lotus with a number of companies, including Daewoo, and had suffered badly from the failure of his other Italian supercar venture, Bugatti.

Although Lotus scraped through with a small pretax profit last year, industry analysts suggested that the company needed a substantial injection of cash from a new partner or a new owner to survive.

The takeover of Lotus by Proton will allow the Malaysian car maker to reduce its dependence on its Japanese partner Mitsubishi Motors Corp and further develop new models in-house.

The significant cash injection will also allow Lotus to double its production of the new small two-seat roadster Elise to 5000 cars a year, which will be split between production in the United Kingdom and Malaysia.

This increase will help the company make a serious assault on new markets in Asia and have another go at North America.

The 1.8-liter Elise, which features a lightweight aluminum chassis, is priced about US$30,000.

Lotus engineering, which will continue to do work for other carmakers, has already been involved in developing a new car for Proton. This model is expected to go on sale in Malaysia next year.

Lotus Engineering has also done work for General Motors, Nissan, Mazda and Isuzu.