In September 2017, Chinese auto giant Zhejiang Geely Holding Group bought a 49.9% stake in Proton Holdings in a deal valued at $107 million. Geely also bought a 51% stake in British sports-car maker Lotus from Proton in a separate deal for a reported $65 million.
Major assets of Zhejiang Geely Holding Group now include Geely Automobile Holdings Ltd. (46%), Volvo Cars (100%), Lotus Motor Cars (51%), Proton Cars (49.9%) and London Taxi (100%). Geely also owns the Australian based DSI (Drivetrain Systems International) since 2009 as well as the Lynk & Co brand which is positioned between Geely and Volvo, targeted towards the upscale market. In July 2017 it also purchased Terrafugia, an American maker of flying cars. In February 2018, Geely Founder Li Shufu acquired 9.69% of Daimler AG becoming the largest single shareholder of the coveted German brand.
At the time of takeover, Geely announced that the company is committed to supporting the transformation of Proton and Lotus with its expertise, and aims to build Proton into the most competitive brand in Malaysia and a leading brand in Southeast Asia.
Proton was the brainchild of former Malaysian Prime Minister Mahathir Mohammad. As the national carmaker it enjoyed all sorts of assistance from the government. The35-year old Malaysian brand at one time was the market leader, commanding three-fourth of the country’s auto sales. But last year it sold only 70,991 units, merely a 12% market share.
Geely group executive vice president and CFO Daniel Donghui Li commented:
“With Proton and Lotus joining the Geely Group portfolio of brands, we strengthen our global foot print and develop a beachhead in South East Asia. Geely Holding is full of confidence for the future of Proton, we will fully respect the brands history and culture to restore Proton to its former glory with the support of Geely’s innovative technology and management resources. We also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development, thanks to our experience accumulated through Volvo Car’s revitalization.”
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According to reports Geely intends to penetrate the Southeast Asian markets with its technology and products using Proton’s brand name. Not only this, the Chinese carmaker intends to dominate the RHD (Right Hand Driven) markets with its range of vehicles sold as Proton. Geely is set to bring forth, one new model every year starting with the Boyue SUV in Malaysia which is expected to launch towards the end of 2018. The RHD version of the Boyue SUV is currently in testing phase and will be launched as Proton’s first SUV with a slight makeover later this year.
It’s not something entirely impossible, especially when you see Geely’s track record. Started as a refrigerator manufacturer back in 1986, Geely saw success selling inexpensive products to Chinese consumers. By mid 1990s it stepped into motorcycle manufacturing and started to develop small vans in 1998. A year later got approval from the Chinese government to manufacture automobiles. The first Geely car rolled out of assembly lines in 2002 while hardly 7 years later, it was able to take over the Swedish marque Volvo in 2010.
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All thanks to Geely, Volvo posted an operating profit of $1.7 billion in 2017, the highest ever since the company started way back in 1927. Now Geely wants to do the same to Proton. In December 2017, Proton’s top dealers were flown to Geely’s headquarters in Hangzhou, China to get briefed on the automaker’s operations and the level of service it provides.
Geely’s future range of vehicles utilizes an interesting mix of technologies. The Compact Modular Architecture (CMA) global mid-size unibody platform, jointly developed by Volvo and Geely under their China Euro Vehicle Technology banner, Lotus tuned suspensions, DSI and Aisin transmissions and Geely’s self developed engine technology, all owned by the Chinese automaker. Furthermore Geely’s new 1.0 liter turbocharged engine will also be deployed in smaller Volvo cars, whereas Lotus might also use Volvo’s powertrains, as reported by British car magazine Autocar.
Both Proton and Geely had their shot in Pakistani market during the previous decade. Proton was introduced by Royal Automobiles whereas Geely was brought in by SUS Motors. Proton vehicles launched in Pakistan included the Saga (1.3), Wira (1.5), Gen-2 (1.3 & 1.6) and Impian (1.6). Geely had launched the CK sedan with 1.3 and 1.5 liter engine options. Both the companies had bigger plans for our market but since they were counting on selling CBU imports without any major investment in the country, were affected badly when the import duties took a toll in 2008.
Although Geely Pakistan’s website still shows a ‘Coming soon to overtake your expectations’ message since 2016, any formal announcement in this regard is yet to be made. Now when Geely has become a global automobile giant and with Proton under their umbrella, it will be interesting to see if they somehow make a comeback in Pakistan with their updated range of vehicles.