China’s Geely Motors Buys Lotus, Hopes to Compete with Ferrari
$RACE, $GELYF, $POAHY
Lotus has a new owner in Chinese automaker Geely (OTCMKT:GELYF), who’s declared ambition is to turn the struggling British sports-car maker into a rival of Ferrari (NYSE:RACE) and Porsche (OTCMKT:POAHY).
A bit far-fetched in that Lotus sold less than 1600 cars globally last year, but the brand’s history in motorsport is prestigious, and the launch of McLaren Automotive has proved that there is a market for supercars from brands with a racing heritage.
Over the 60 years that I have know about Lotus has gone from 1 financial crisis to crisis with depressing regularity throughout the last 30 odd years.
On 24 May 2017, Geely announced that it will take a 51% controlling stake in Lotus. The remaining 49% will be acquired by Etika Automotive.
The latest, in Y 2012 with the collapse of Dany Bahar’s plan to launch a range of 5 all-new sports cars.
Since then the company has struggled to raise money from investors, and it has been unable to do more than facelift its Elise/Exige and Evora model ranges.
The purchase by Geely was part of a bigger deal that saw the Chinese automaker take a 49% stake in Lotus’s former owner, Malaysian manufacturer Proton.
Although the Lotus side of the deal was much smaller, Geely insiders say that the chance to take control of the iconic brand was a huge part of the appeal to company President An Cong Hui.
“We are making plans. We want to bring back the heritage of Lotus to be one of the top performers in the luxury-sports-car segment,” An said in China earlier this week. “Lotus used to be ranked alongside Ferrari and Porsche, so we need to come back in that rank again.”
Geely also owns Volvo, even so that is a very ambitious goal. But, as the Chinese are becoming very aware of the world’s car culture they clearly want to be a major player in it.
Next, I expect Lotus new Boss An Cong Hui to ready a F1 team for Y 2020, Lotus is an iconic racing brand. Colin Chapman is a legend.
Have a terrific weekend
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