Bloomberg reported that Zhejiang Geely Holding Group Co. (Geely), the Chinese owner of the iconic Lotus Cars is considering investing £1.5 billion (~$1.9 billion) to revive the British brand. Geely, which also controls the Volvo Car Group, and is planning to increase production facilities as well as research centers for Lotus in the UK.
This information was revealed to Bloomberg by internal sources that asked not to be identified as these discussions were still private. According to these sources, Geely is also carrying out negotiations with Etika Automotive Sdn. Bhd., its Malaysian partner, to increase its 51% stake in Lotus cars. Etika owns the other 49% of the Lotus car brand.
Geely sent out an official email that stated that the Chinese company is fully committed to restoring Lotus to its status as a global luxury brand leader. However, beyond that, the company refused to comment about its possible investment in the British brand. Etika did not answer any calls for more information.
Geely’s Chairman, the billionaire Li Shufu wants to make his company one of the leaders of the auto industry and join the ranks of Volkswagen AG and Toyota Motor Corp.
To this end, Geely acquired Volvo from Ford back in 2010. The Chinese company then spend over $11 billion in modernizing its factories and turned the Swedish brand around. Then, this year in February, it was revealed that Li was also the biggest shareholder in German luxury car manufacturer Daimler AG, with a nearly 10% stake in the company.
According to the sources, Geely has created a massive plan to be carried out in various stages, by which the Chinese conglomerate hopes to take Lotus to the top to compete with the likes of Porsche and Ferrari. The first phase of this plan would involve expanding Lotus’ Hethel plant by hiring another 200 engineers. Next, the company is planning to build a secondary plant in the UK, maybe in the West Midlands area.
Geely may even add a new innovation and design center in the country, with the possible location for this center being Coventry. Two months ago, the company had issued an official email with a similar reference to a center being built in Coventry.
Lotus, which once upon a time was a luxury car associated with the James Bond movies in the 1970s and 1980s (The Spy Who Loved Me and For Your Eyes Only), suffered severely due to mismanagement after the brand was acquired by Proton in 1996 for a sum of £51 million (~$54.97 million).
Geely purchased Lotus’ stake from Proton Holdings Bhd. in 2017, at the same time that the Chinese conglomerate also announced the purchase of a 49.9% stake of Proton from the Malaysian conglomerate owned by Syed Mokhtar Al-Bukhary, DRB-Hicom Bhd., the tycoon who also owns Etika.
So for, for this year, Lotus has sold only 145 cars in the UK, which is a 25% drop in sales from 2017, according to data obtained from the Society of Motor Manufacturers and Traders.
Now, Li’s main focus will be to turn both Proton as well as Lotus around to become self-sustaining, growing and profitable ventures once again. He is also planning to modernize both brands by embracing new technology trends such as electrification of the cars as well as incorporating Artificial Intelligence into the vehicles’ systems. Li also said that they were looking at maybe manufacturing the sports designs of Lotus cars in his home country of China.
Li’s dream is to take his company as well as his country to the forefront of auto manufacturing.