KUALA LUMPUR - Malaysian conglomerate DRB-HICOM will sell a 49.9 per cent stake in struggling national car brand Proton to Chinese automaker Zhejiang Geely Holding Group, the companies said on Wednesday (May 24).
The Chinese company, which owns Swedish brand Volvo and the London Taxi Company, will also acquire 51 per cent of British sports car maker Lotus Cars from Proton.
The two parties signed the agreement at a ceremony in Putrajaya witnessed by Malaysia's Second Finance Minister Johari Abdul Ghani.
"Whilst there have been a few serious attempts to find a strategic partner for Proton, we were never successful... Our very own and much loved brand now has a real chance in making a comeback, a huge one I hope," said Datuk Seri Johari.
Banking on Geely's success with Volvo and London Taxi, Proton is seeking a revival of fortunes by tapping into Geely's resources of funding, network and technology.
The deal will enable Proton to tap into Geely Holding's vast range of platforms and powertrains, and will also enable Proton to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in South-east Asia," said the statement by DRB-HICOM.
For years, Proton has suffered from stiff competition and poor sales, despite billions of ringgit injected by the government. The ailing company had spent RM3.5 billion (S$1.1 billion) in research and development, of which Mr Johari says the government is reimbursing RM1.1 billion.
Lotus Cars will be sold for 100 million pounds, with the remaining 49 per cent to be acquired by Etika Automotive, a subsidiary of Etika Strategi, a holding company owned by Malaysian tycoon Syed Mokhtar Al-Bukhary. Tan Sri Syed Mokthar controls DRB-HICOM via a majority stake owned by his company Etika Strategi.
Group Managing Director Syed Faisal Albar said the Proton brand will "grow significantly" with the new foreign strategic partner on board.
"Our intention was always to ensure the revitalisation of the Proton nameplate. It was Malaysia's first national car brand and has more than 30 years of history. This deal will be the catalyst to elevate a brand that Malaysians resonate with," said Mr Syed Faisal.
