Proton takes over carmaker Lotus

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.