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Geely pulls out of Proton bidding process
Accusing executives of Proton of indecisiveness in their plans, the Chinese car maker has pulled out of a bidding war with the PSA Group
Emerging Chinese car maker Geely has announced it has pulled out of the bidding process for Proton, accusing executives of the Malaysian car maker of indecisiveness in their plans.
Geely, which this week announced record own brand sales of 766,000 in 2016, has been in a bidding war with the PSA Group for financially-embattled Proton, which is reported to have sold just 75,000 cars last year.
“They keep changing, today it’s this, tomorrow it’s that,” said Geely chairman Li Shufu. “They haven’t decided what they want.”
The decision by Geely not to pursue Proton places Peugeot and Citroën's parent company, PSA, in the box seat to buy the ailing Malaysian car maker, which is required to attract a foreign partner due to loan conditions from a financial rescue package settled in 2016.
Proton, which is controlled by Malaysian entrepreneur Syed Mokhtar Al-Bukhary and his company DRB-Hicom, was established in 1983 by former Malaysian prime minister Mahathir Mohamad as part of the country’s extensive industrialisation program.
Geely, which is the parent company of Volvo, the recently announced Lynk&Co brand and the London Taxi Company (LTC), had been eying up Proton as part of a global expansion programme that insiders suggest also included the purchase of Proton-owned Lotus.
Speaking to Autocar at the recent Geneva motor show, a high-level Geely executive who asked not to be identified suggested preliminary plans had been drawn up to use Proton’s underutilised Tanjung Malim manufacturing facilities to produce right-hand-drive versions of the recently unveiled Lyn&Co 01 SUV for export to various markets including the UK, Australia and South Africa.
Further plans included establishing Proton as an entry-level brand within the growing Geely portfolio.
“Geely has established itself as a reputable middle-class brand in China thanks to its links with Volvo. The purchase of Proton would give it a new entry-level point, which is considered crucial to further growth,” the executive said.
By using Proton as an entry level brand, Geely would also have key exposure to the potentially lucrative south-east Asian car market in markets such as Malaysia, Indonesia and the Philippines.
More crucial to British jobs, according to Autocar’s source, was Geely’s intention to bundle Lotus with its earlier planned purchase of Proton.
“My chairman is desperate to buy a sports car maker. We’ve spoken to Aston Martin and others, but Lotus has always been the target,” he said.
Among the attraction in Lotus is the Norfolk-based manufacturer's lightweight platform technology and engineering consultancy business.
With Geely now out of the running, PSA is expected to finalise its bid for Proton. Officials from the French car maker, which confirmed its purchase of Opel/Vauxhall earlier this month, say they expect a final decision on plans for Proton by the start of summer.
Geely and PSA are the latest in a long line of bidders for Proton, which is also said to have considered recent proposals from Skoda, Renault and Suzuki. Earlier talks had also linked the Malaysian car maker with Volkswagen, Honda and Toyota.
http://www.autocar.co.uk/car-news/industry/geely-pulls-out-proton-bidding-process
Accusing executives of Proton of indecisiveness in their plans, the Chinese car maker has pulled out of a bidding war with the PSA Group
Emerging Chinese car maker Geely has announced it has pulled out of the bidding process for Proton, accusing executives of the Malaysian car maker of indecisiveness in their plans.
Geely, which this week announced record own brand sales of 766,000 in 2016, has been in a bidding war with the PSA Group for financially-embattled Proton, which is reported to have sold just 75,000 cars last year.
“They keep changing, today it’s this, tomorrow it’s that,” said Geely chairman Li Shufu. “They haven’t decided what they want.”
The decision by Geely not to pursue Proton places Peugeot and Citroën's parent company, PSA, in the box seat to buy the ailing Malaysian car maker, which is required to attract a foreign partner due to loan conditions from a financial rescue package settled in 2016.
Proton, which is controlled by Malaysian entrepreneur Syed Mokhtar Al-Bukhary and his company DRB-Hicom, was established in 1983 by former Malaysian prime minister Mahathir Mohamad as part of the country’s extensive industrialisation program.
Geely, which is the parent company of Volvo, the recently announced Lynk&Co brand and the London Taxi Company (LTC), had been eying up Proton as part of a global expansion programme that insiders suggest also included the purchase of Proton-owned Lotus.
Speaking to Autocar at the recent Geneva motor show, a high-level Geely executive who asked not to be identified suggested preliminary plans had been drawn up to use Proton’s underutilised Tanjung Malim manufacturing facilities to produce right-hand-drive versions of the recently unveiled Lyn&Co 01 SUV for export to various markets including the UK, Australia and South Africa.
Further plans included establishing Proton as an entry-level brand within the growing Geely portfolio.
“Geely has established itself as a reputable middle-class brand in China thanks to its links with Volvo. The purchase of Proton would give it a new entry-level point, which is considered crucial to further growth,” the executive said.
By using Proton as an entry level brand, Geely would also have key exposure to the potentially lucrative south-east Asian car market in markets such as Malaysia, Indonesia and the Philippines.
More crucial to British jobs, according to Autocar’s source, was Geely’s intention to bundle Lotus with its earlier planned purchase of Proton.
“My chairman is desperate to buy a sports car maker. We’ve spoken to Aston Martin and others, but Lotus has always been the target,” he said.
Among the attraction in Lotus is the Norfolk-based manufacturer's lightweight platform technology and engineering consultancy business.
With Geely now out of the running, PSA is expected to finalise its bid for Proton. Officials from the French car maker, which confirmed its purchase of Opel/Vauxhall earlier this month, say they expect a final decision on plans for Proton by the start of summer.
Geely and PSA are the latest in a long line of bidders for Proton, which is also said to have considered recent proposals from Skoda, Renault and Suzuki. Earlier talks had also linked the Malaysian car maker with Volkswagen, Honda and Toyota.
http://www.autocar.co.uk/car-news/industry/geely-pulls-out-proton-bidding-process
