Proton 'gearing up to lose Lotus'

Speculation that Lotus Group International is for sale is revving up again.

Proton, the Malaysian manufacturer of sedans and taxis, bought control of Lotus in 1996 but has yet to make a profit from the Norfolk-based British sports car subsidiary, a situation likely to continue to at least 2014.

Now that Proton itself could be divested by its state-run parent, LGI is said to be on the grid for an early sale in 2012.

Proton in October denied it planned to sell LGI to investment company Genii Capital, founded and run by Gerard Lopez.

It said then that its relationship with Group Lotus was as good as it has ever been. However, it did say it was open to discussions about outside investment in Lotus.

Lotus has struggled to compete against Germany’s Porsche and Italy’s Ferrari in Europe, and has kept its top reputation in the automotive industry partly because of its long expertise in designing lightweight frames. Its Lotus Elise model, weighing only 910kg, is one of the lightest performance cars on the market.

Lotus’ DNA shows few similarities with that of its Malaysian owner and for that reason alone analysts feel Proton should unload it.

Lotus makes sports cars which sell for the equivalent of as much as R1.3 million in Malaysia, while Proton sells cheap hatchbacks for the equivalent of R120 000.

Even in the UK, Lotus sales are struggling. Only 272 cars were registered in the first eight months of 2011, compared with 358 in the same period last year - 24 percent down in an overall market that’s down six percent.

Last June Proton unveiled a five-year transformation blueprint for Lotus, including a new management team and plans to launch five new models and boost production to 8000 cars a year after 2013.

Lotus chief executive Danny Bahar is confident he can make the company break even by 2014, as long as he has the financial backing - but he might have to rely on a new owner to make his plan work. - Daily Mail