Proton to go on sale, hinders Lotus' plans for expansion

Intention by the Malaysian Government to sell off their stakes in Proton has been reported. The local car manufacturer saw a fifty per cent rise in the value of their stocks in Kuala Lumpur trading last month. Leading company in the local automobile industry, DRB-Hicom, is said to be one of the contender for bids. In addition, it has been reported that two other multi-national companies – Chinese car marker Shanghai Automotive and Luxembourg’s Genii Capital has expressed their interests in the acquisition, although no official reports has been made.

Experts in the field foresee divest in Protons’ 64 per cent stake in Lotus, if sale is to go through, so as to raise capital to increase Proton’s market share in Malaysia, where it reports a 76 per cent fall in profit. The diminishing support could lead to the demise of Lotus, which has plans to launch 6 new models by 2016, and return to profitability only by 2014.