Report: Proton may sell Lotus Cars image

Proton Holdings, the Malaysian company that owns Lotus Cars, is considering selling the UK-based sports car manufacturer.

According to investor Gan Eng Peng cited by Bloomberg, Lotus Group International is ripe for a sale, taking into account that Proton itself may be divested by its state-run parent. Another reason for the sale would be the fact that Lotus hasn’t made any profit for 15 years and probably won’t at least until 2014.

“It will make sense for them to sell it. Proton and Lotus are not a good fit. They are in different market segments, both in terms of geography and product,” Gan Eng Peng, head of equities at HwangDBS Investment was quoted as saying by Bloomberg.

Lotus has survived until now largely due to its expertise in designing lightweight frames. It struggled to compete against Porsche and Ferrari and may need the backing of a carmaker more global than Proton in order to survive in a fiercely competitive industry.

According to reports from China, Shanghai Automotive Industry Corporation (SAIC) may be interested in Lotus. Rumors also circulated about Genii Capital wanting to take control of the carmaker. In order to be profitable, Lotus will have to sell 8,000 vehicles a year instead of the 1,935 units it sold for the year ending March 31.