China's Geely Group has stepped up its global expansion drive by buying into Malaysia's troubled carmaker Proton. It also secured a huge stake in British automaker Lotus as part of the Kuala Lumpur investment.
Chinese auto giant Geely on Wednesday announced it had bought a 49.9-percent stake in Malaysia's carmaker Proton. As part of the deal, the Chinese would also acquire 51 percent of British car manufacturer Lotus from Proton for 51 million pounds ($66.2 million, 59.2 million euros), officials said.
"With Proton and Lotus joining the Geely Group portfolio of brands, we strengthen our global footprint and develop a beachhead in Southeast Asia, Geely Vice President Daniel Li Donghui said in a statement, adding that the target was for Proton to produce 500,000 cars by 2020 for the Southeast Asian markets.
Geely already owns Sweden-based Volvo Car Corporation, which has made a remarkable comeback since it was sold by the Ford Motor Company back in 2010.
Geely's investment in Proton is widely believed to be a blessing for the Malaysian firm. With government support, Proton initially dominated the domestic market, but subsequently struggled with making profits as it suffered from a reputation for unimaginative models and shoddy quality.
The Malaysian company produced the nation's first national car brand, looking back at a history of more than 30 years.
"Wednesday's agreement lays the foundation for a wider framework for Geely plus Proton and Lotus to explore joint synergies in areas such as R & D, manufacturing and market presence," Geely commented.
hg/jd (AP, AFP)