Volkswagen Buys Proton/Lotus (Post #36)

[YSSMAN]

Hows this for a new idea?

General Motors is considering acquiring Malaysian automaker Proton, according to reports by the Business Times and Reuters. Auto enthusiasts in North America may be most familiar with Proton as the company that acquired Lotus in 1996.

"Let me put it this way; GM has shown interest in Proton, and if they put in a bid we will consider it," finance minister Nor Mohamed Yakcop told reporters. "There are three of them now who are foreign companies that are interested and they come in different forms and proposals. Now we are finalising the discussions and the comparisons, they are not identical interests," he said.

Analysts say the problems at loss-making Proton could be solved by a foreign partnership. There is speculation GM could use Proton's state-of-the-art production facilities to build low-cost cars. Proton is valued at as much as $1.6 billion.

I can easily say that I'm all for the deal. Okay, GM doesn't have a lot of money to throw around, but Proton/Lotus is a group that I wouldn't want to pass-up... Particularly the Lotus portion of the group. Simply put, GM has a lot to gain by having Lotus on board, particularly with performance-oriented design folks be it on the engine, suspension, transmission, or general engineering projects.

I do have to wonder what exactly GM will do with the Proton brand itself. It certainly isn't a winner in most markets (that I know of), so will it be combined into the Daewoo grouping? Hmmm...

But as noted in the story, there are other buyers out there. A good guess would probably be companies like VAG and maybe Honda or Toyota, but of all the listed companies, I by-far would want GM to go for it. There would be a lot to gain both for Proton and for GM in that situation... Given GM's history with the company, we know they can do great things together, and I'm hoping that the same happens in the near-future.

 

[exigeracer]

Let me just say I am praying if this works out that it will be a one-way road. I can deal with the embarassment of something like GM demanding Lotus does up something like a "sporty" (read: lame) Lotus-tuned version of the Aveo, I certainly won't let GM touch Lotus in any way at all. One way road.

There's been a lot more information on this topic floating around for several weeks now, but I just haven't had the time to read up on any of it. There are probably a lot of Lotus kids who are up in arms over this. We'll have to wait and see. The last time Lotus or Proton commented on the relations betwen the two, things were going fine for the long-term, with talks of cooperative projects reaching into the new decade.

 

[Dave A]

As long as it doesn't interfere with the new Esprit, GM have the funding and such to allow a company like Lotus to continue to develop leading models in their market. I agree that it needs to be a one way deal though, Lotus should be giving ideas and setups to GM and what not, but Lotus do what they need to do really well by themselves to make thier own cars work.

 

[harrytuttle]

I guess this should make it easier to get the LS6 into the Esprit.

It's definitely a company that could use an exotic brand, but I don't think their recent history (Solstice, etc.) is a good fit for a company that is all about lightweight sports cars. I would expect that the Toyota 1.8L engine & transmission will get the boot next chance GM gets, and I can't imagine what they would replace it with. The closest thing would be GM's 2.4L (Solstice, again), but that's more of a Europa engine, not an Elise part.

Financially, it's a good fit, but awkward -- at best -- in every other sense.

 

[Tornado]

GM wants Lotus again?! Because you know that is the only reason they want Proton. They want Lotus without the danger of actually having Lotus.

 

[YSSMAN]

Let me just say I am praying if this works out that it will be a one-way road. I can deal with the embarassment of something like GM demanding Lotus does up something like a "sporty" (read: lame) Lotus-tuned version of the Aveo, I certainly won't let GM touch Lotus in any way at all. One way road.

I highly doubt that GM would be looking to acquire Proton, and thereby Lotus to do work on their small cars, however, I wouldn't put it out of question that Lotus would be a handy tool in the design and development of all-new vehicles, and more than likely would become a key-element behind the GMPD program that builds our SS, Red Line, GXP, and V-Series products.

I would expect that the Toyota 1.8L engine & transmission will get the boot next chance GM gets, and I can't imagine what they would replace it with. The closest thing would be GM's 2.4L (Solstice, again), but that's more of a Europa engine, not an Elise part.

My guess would be that GM would supply one of it's German-derived ECOTEC engines, not one of the slightly oversized and underpowered American units. However, the American/German 2.0L direct-injection turbo could be an interesting match up in the Elise, however GM will need to find a better transmission to go with it, as many people agree that the automatic is currently the better choice with that engine in the Solstice GXP and Sky Red Line.

Chances are that if Lotus was aquired by GM, they wouldn't kick the Toyota-sourced parts to the curb right away (given GM uses Toyota parts in the Vibe currently...), however I would put my marbles in the bag that says they would eventually have to convert to ECOTEC stock. More than likely they would go shopping down the Family II isle, which will pretty much leave them with three options:

1) Adopt either the 2.2L LNF (DI Turbo) or 2.2L LSJ (supercharged) for more power
2) Go cheap and buy the 2.4L LE5, good for 170 BHP and 170 lb ft. Modify it to spin a little better...
3) Use some GM-supplied bucks to design an all-new engine based on the Family II design, preferably around 2.0L in size...

 

[TheCracker]

GM have already owned Lotus (and sold them for £30m in 1993) - why do they want to buy them back?

Lotus will pimp out their engineering skills to anyone who wants it. GM don't need to buy them for a helping hand with chassis development and set-up.

 

[V1P3R]

They are already dragging enough companies though the mud and they want more?

 

[YSSMAN]

They are already dragging enough companies though the mud and they want more?

When was the last time they were dragging most of the important brands?

...Either way, if GM does buy Proton, I suspect that they will "pull a Subie" and let Proton/Lotus do as they please, however, that doesn't mean that they won't be tapped for various things for other GM cars. Think about how GM was using Subaru for Saab a while back, you'll get the idea...

 

[TheCracker]

When was the last time they were dragging most of the important brands?

...Either way, if GM does buy Proton, I suspect that they will "pull a Subie" and let Proton/Lotus do as they please, however, that doesn't mean that they won't be tapped for various things for other GM cars. Think about how GM was using Subaru for Saab a while back, you'll get the idea...

You mean like they already have done with the Elise/VX220?

 

[YSSMAN]

I thought they dropped the VX/Speedster in favor of our Kappa-based cars (ie Solstice/Sky/GT)? Or have they not done the right-hand-drive version yet?

 

[ExigeEvan]

Like what some of the others have mentioned, this doesn't make sense.

Lotus are a company that is happy to sell it's engineering knowledge and even production capabilities for a price, so why does GM need to buy them?

And what about Proton? My money is that they will just become a new member of the Cheverlet family, just like Daewoo have.

 

[TheCracker]

I thought they dropped the VX/Speedster in favor of our Kappa-based cars (ie Solstice/Sky/GT)? Or have they not done the right-hand-drive version yet?

The VX220/Speedster has come to the end of its production life - probably because of poor sales. It's not a bad car in any shape or form, far from it, its more the fact of 'which badge would you prefere your sportscar to have' - Vauxhall, Opel or Lotus? - it's a no-brainer as far as most people are concerned especially when they cost pretty-much the same.

Opel are bringing out a Kappa-based (rebadged Sky i believe) Opel GT but you are right - there will be no RHD version because of tooling costs.

And what about Proton? My money is that they will just become a new member of the Cheverlet family, just like Daewoo have.

Why do you need a 'Proton' when you already have a 'Daewoo'?

 

[ExigeEvan]

Why do you need a 'Proton' when you already have a 'Daewoo'?

Are Daewoo's sold on all the same markets as Protons?

I imagine Proton have quite a loyal clientel in Malaysia so perhaps just sticking Chevy badges on those models in preperation for replacement with Daewoo models in future would work.

 

[Jim Prower]

It's...interesting. Especially considering that Lotus did do the Opel-based Calrton. Perhaps we'll see that one make a comeback with the advent of the Zetas. Twin-Turbo V6, anyone?

On the Elise engine, well, we know what sort of magic Lotus does on their mills. Also, consider that it's pretty much the only US-market car that uses the 1.8 Toyota, I'd think an engine change would come fairly soon, (or full Lotus licensing of the engine,) and the Ecotec's not bad. Considering the Elise uses a front-drive (or front-drive-style) transaxle, perhaps the Cobalt SS Supercharged's tranny would work. Also remember that GM still holds a stake in NUMMI, Toyota's Corolla plant in California, and that the Vibe is still built there on the Corolla (actually, sold in Japan in re-badged Pontiac form as the Toyota Voltz) platform.

Believe me, I own a Chevy with a 4A-C.

 

[exigeracer]

Also, consider that it's pretty much the only US-market car that uses the 1.8 Toyota, I'd think an engine change would come fairly soon, (or full Lotus licensing of the engine,) .

Unless they've been discontinued, the Celica GT-S and Matrix XR (IIRC the name) both used the 1.8 before Lotus and Yamaha borrowed it. I'm not sure if either of those cars are still being sold, they're both fairly old by now.

 

[Jim Prower]

Unless they've been discontinued, the Celica GT-S and Matrix XR (IIRC the name) both used the 1.8 before Lotus and Yamaha borrowed it. I'm not sure if either of those cars are still being sold, they're both fairly old by now.

Nope, both Celica and Matrix XRS (and Pontiac Vibe GT, also with the 1.8) are gone, the Celica and Matrix completely wiped from Toyota's lineup, and the Pontiac still soldiering on with the lesser mills.

 

[TsLeng]

You see..the car market in Malaysia is screwed up.
There are high taxes imposed on all cars sold especially imported ones EXCEPT national cars which = PROTON. But that may change when those free trade agreements comes into place. In the short term , acquiring proton means they are able to sell rebadged cars at low price san tax(which consumers will happily buy since the current range is crap)

That said, GM acquiring proton does have some benefits. Malaysia is by far still the largest car market in SEA. But thailand is catching up. With proton, GM gets Lotus, and a Huge high tech plant with 1 million capacity/year(if im not mistaken).
And with ASEAN free trade agreement, they can use that as a base to manufacture their cars and export them in SEA.

 

[Jim Prower]

That's kinda sneaky....I like it....unless Malasya starts taxing Proton to high hell, too, because it's now a G.M. brand.

 

[Poverty]

Personally I think people are looking too much into this. GM dont care about lotus, its proton and the market that they are established in thats the big money maker.

 

[TsLeng]

That's kinda sneaky....I like it....unless Malasya starts taxing Proton to high hell, too, because it's now a G.M. brand.

Well...it kinda is...but then , there is another national car maker Perodua. Which is making profits and gaining market share now while Proton is losing big money and losing market share thanks to completely lousy quality cars( eg Proton Waja power windows) and consumers are switching whenever they can. There is no brand loyalty to Proton.

 

[YSSMAN]

Personally I think people are looking too much into this. GM dont care about lotus, its proton and the market that they are established in thats the big money maker.

You could be right, but I think Lotus plays a huge role in the decision to go after Proton. When it comes down to it, having Lotus in-house means that they don't have to order-out their help to get things built or modified, they could then do it all in-house. My guess is that if Lotus joined up, we'd probably see quite an increase in high-performance vehicle development, and over at Lotus, they would have some pockets to fish in to get further development of their "crossover" and the Esprit finished by the end of the decade.

...However, I doubt that Chevrolet (as noted before) has anything to do with anything. Given that in the world market they are sold only as re-badged Daewoos and Suzukis, a moved forced by both companies in some places, most sane people realize that the true Chevrolets are sold in America and Canada alone. With a good amount of understanding GM, Proton would probably exist as another Daewoo spin-off, but I'm not sure to what extent that would happen. Or maybe GM will soldier on with the current Proton build-types...?

It is anyones guess, and there is obviously nothing solid happening here.

 

[exigeracer]

You could be right, but I think Lotus plays a huge role in the decision to go after Proton. When it comes down to it, having Lotus in-house means that they don't have to order-out their help to get things built or modified, they could then do it all in-house. My guess is that if Lotus joined up, we'd probably see quite an increase in high-performance vehicle development, and over at Lotus, they would have some pockets to fish in to get further development of their "crossover" and the Esprit finished by the end of the decade.

But wouldn't the monetary advantage of having Lotus in-house for their engineering capabilities be outweighed by the money they would need to put into Lotus to keep it sustainable? I have doubt that this transaction has much to do with Lotus, but that still can't be a good thing. Let's say GM does pick up Proton, realise that Lotus isn't worth keeping and ditch the company to an even less stable owner, and things go down the crapper faster than you can say Nikolas Smolenski. Reference intended.

To be honest, GM is looking for a quick buck on the side, and owning a small-time sportscar company to produce edgier versions of existing cars won't solve their financial headaches. GM can already make some so-so sportscars, they have engineering capabilities of producing engines and components (but wasn't the Ecotec a Lotus-designed unit anyways?).

Lotus's consultancy gets hired to work on specialty vehicles, take a look at any random bunch of cars they've worked on in the past 5 years, that VW tricycle, Ford GT, Cobalt racer etc etc. Manufacturers don't make much money off of cars like these.

 

[harrytuttle]

I highly doubt that GM would be looking to acquire Proton, and thereby Lotus to do work on their small cars, however, I wouldn't put it out of question that Lotus would be a handy tool in the design and development of all-new vehicles, and more than likely would become a key-element behind the GMPD program that builds our SS, Red Line, GXP, and V-Series products.

I see Proton disappearing and becoming part of Daewoo, and doing so brings GM easier access to Malaysia (tax issues probably worked around somehow). I totally blanked when it came to GM & Lotus' history. The Carlton is a perfect example, and I would hope for much more. You're right about GM's treatment of Subaru (my own experience should have reminded me of this). I think great things can happen here: GM gets a huge tuning & handling knowledge base, and Lotus gets a huge financial backer. Elises for all!

I also forgot about the Esprit's progression, which closely resembles the Elise: small I4 engine, then a I4 turbo (s/c), then a larger I4 turbo.... Who knows; maybe GM will figure out how to shoehorn the LS7 in there.

 

[YSSMAN]

...I was thinking of having Lotus cram-in the Cadillac-sourced 4.4L S/C Northstar V8 from the STS-V, good for 469 BHP. That should keep things interesting, and should keep up with the luxury demands for the car...

 

[Tornado]

No way in hell. The damned thing would be far too heavy, and while the Esprit was never a lightweight, it was always well balanced.

 

[TheCracker]

...and while the Esprit was never a lightweight, it was always well balanced.

Never a lightweight? It started off weighing under 1000kgs and ended up still weighing less than 1280kgs - 50kgs less than a Mk5 Golf.

 

[niky]

RE: Chevy selling rebadged Daewoos and Suzukis: That's a slight mistake... they're actually selling rebadged Daewoos and Isuzus (our Isuzu seven seater POS is now sold as a Chevy in India... no, it's really not a Chevy as it's been in-house at Isuzu in Asia for the past fifteen years). It's just that Suzuki USA is also selling rebadged Daewoos.

-----

GM is interested in Proton not for an inherent engineering qualities or good products, but for the market they represent. With current talks to establish free trade in the ASEAN region, having a home base in Malaysia will enable them to increase volume and offer lower prices in that region compared to what they're doing now with the Korean plants.

This'll enable them to sell more crappy Forenza/Optras and Chevy Luminas (not the rear drive Holden ones, mind you, but the ten-year old Lumina/Regal that the Chinese seem to love so much) at lower prices as direct competition to the Koreans and the Japanese on their budget car home turf.

I don't see GM keeping the Daewoo name for the ASEAN market it's targetting with Proton, as too many people still have negative preconceptions about them (if DAEWOO was FORD, the Found-On-Road-Dead thing would be totally appropriate). Unfortunately, they have the same feelings about Protons. Most likely, they'll use the Chevy name for these cars or try to "reinvigorate" Proton with Hybrid products.

The Gen.2 would actually help update GM's Chevy/Daewoo line-up, which is getting very very long in the tooth, with cars that were outdated when they were launched. The Chevy Lumina, Optra/Forenza, Aveo and Spark/Matiz are all well past their sell-date, and GM probably needs some input from Proton on where to go from here.

Daewoo and Proton are both crappy car companies, but maybe put together, they might equal one decently good one...

-----

Lotus is just a bonus. Let's just hope they keep relatively hands off on Lotus operations.

 

[TheCracker]

Daewoo and Proton are both crappy car companies, but maybe put together, they might equal one decently good one...

Or one extra crappy one

 

[TsLeng]

Everything in Malaysia with government involvement = crap.

Simple example:

Malaysia airlines: has all the advantages of being the national carrier and among the best airlines in the world, but..unprofitable for god knows how long. Reason is the government has a hand in it...politics..corruption..you name it, they have it.

Air asia: Basically unknown 5 years ago but now asia's largest budget carrier. Reason = effective management without messy politicians.

Proton had the opportunity to be world class, the had lotus, the once had MV agusta, the once had the full support of the citizens(in the beginning from 1985-1995) and then it started to rot....