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What can Proton offer Lotus, and vice versa?

July 30, 2012

FMT LETTER: From Lee Sing Leong, via e-mail

I read with astonishment that Proton is going to continue “pumping” hundreds of millions of ringgit into loss-making Lotus, without any clear plan whatsoever. The promised “5 new models in 5 years” turnaround plan were scrapped by the new CEO

Talking about turnaround, let’s discuss what can Lotus offer Proton, and vice versa?

According to Proton, it acquired Lotus mainly for its engineering expertise. But do you need to spend hundreds of millions of dollars (and hundreds of millions more to help it stay afloat every year) to buy the company just for this “expertise”?

Proton could have easily hired Lotus on a contract basis for its consulting services, and save tons of money that could be used to improve the quality of its products, instead of the much hyped “Lotus ride and handling”.

The “Lotus ride and handling” tagline might sound glamorous but in reality Proton only sells most of its cars in the protected Malaysian market, where the roads are filled with potholes. Perhaps this is the reason for the Lotus ride and handling – to avoid potholes.

Jokes aside, can Proton build or even rebadge an affordable Lotus for the rakyat? No again, and herein lies the problem.

Proton does not have any suitable platforms nor engine technologies to offer Lotus and help it develop new models. Do you expect Lotus to use Campro engines or the Preve platform, etc. to build its own sports cars? And charge its clients hundreds of thousands of dollars for an essentially rebadged Proton?

Lotus is primarily an engineering company, and it does not have many models in its lineup. They used to use Toyota engines in their cars last time.

Only the big players like VW have the technology, platforms, engines, and financial fire power to pump money into small players such as Lamborghini and Lotus and help it come up with new exciting models, instead of the same boring Exige.

The auto industry was filled with examples of big players such as GM (Saab), Ford (Volvo, Jaguar) losing billions after continuing pumping money into small niche players they bought.

Hoping to stop the losses, they finally sold them for peanuts. If these huge multinationals failed, what makes Proton think it can succeed? Or is it just another case of pride and “syiok sendiri” mentality?

It doesn’t take a PhD holder to realise that Proton and Lotus reaped little benefits from their marriage. While Lotus is feeding on Proton’s cash, Proton is feeding on its pride.

They are just not made for each other.


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