Geely Mulls $1.9 Billion Revival Plan for Lotus Cars
Geely Mulls $1.9 Billion Revival Plan for Lotus Cars
(Bloomberg) -- The Chinese owner of Lotus Cars is considering an investment of at least 1.5 billion pounds ($1.9 billion) to revive the iconic British brand featured in James Bond movies, according to people familiar with the matter.
Zhejiang Geely Holding Group Co., which also controls Volvo Car Group, plans to add production facilities and research centers for Lotus Cars in the U.K., one of the people said, asking not to be identified because the deliberations are private. Geely is also in talks to increase its 51 percent stake in Lotus with its Malaysian partner Etika Automotive Sdn Bhd., which holds the remainder, another person said.
“Geely is fully committed to restoring Lotus into being a leading global luxury brand,” the automaker said in an email, declining to comment further. Calls to the office phone line of privately held Etika Automotive weren’t answered.
The investment plan is part of Billionaire Li Shufu’s grand vision to take Geely to the forefront of the auto industry rivaling Toyota Motor Corp. and Volkswagen AG. Li’s group acquired Volvo in 2010 and spent more than $11 billion to modernize its factories and help turn around the Swedish brand. In February, Li emerged to be the biggest shareholder in German luxury-car maker Daimler AG with an almost 10 percent stake.
Under Geely’s proposal, the first phase would involve an expansion of Lotus’s Hethel plant with the hiring of 200 engineers, according to one of the people. Later, it plans to set up a second factory in the U.K., potentially in the West Midlands region, and add a new design and innovation center possibly in Coventry, the person said. Two months ago, Geely had committed to a new U.K. design studio in Coventry, Geely said in its email.
The Chinese carmaker is hoping to build Lotus as a luxury nameplate that competes with Porsche and Ferrari.
Lotus, whose cars were featured in the James Bond movies “The Spy Who Loved Me” in 1977 and “For Your Eyes Only” in 1981, has floundered under Proton management since being acquired for 51 million pounds in 1996. In the seven months through July this year, it sold just 145 cars in its home country, with sales falling 25 percent according to registration data from the Society of Motor Manufacturers and Traders in London.
Geely acquired the Lotus stake from Proton Holdings Bhd. last year, when it also announced buying 49.9 percent of Proton from DRB-Hicom Bhd., the Malaysian conglomerate controlled by tycoon Syed Mokhtar Al-Bukhary, who also owns Etika Automotive.
After the acquisition, Li said the priority will be to make Proton and Lotus profitable and to sustain growth while embracing new technology trends of electrification and artificial intelligence. He also said Geely would consider producing Lotus sports cars in China.
--With assistance from Yudith Ho.
To contact Bloomberg News staff for this story: Yan Zhang in Beijing at yzhang1044@bloomberg.net;Haze Fan in Beijing at hfan40@bloomberg.net
To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan
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