Lotus? What will happen to you?

As many Malaysians would aready know, our #1 national car company Proton Holdings owns a majortiy stake in Lotus Group International Limited. Lotus Group International Limited is the holding company of Lotus Group. Still with me?

Here's the latest news:

Group Lotus, the Norfolk-based sports car maker and engineering consultancy, is to be given "a completely fresh start" by its Malaysian owner after running up £40m in debts. [Source: FT.com]

Ok, fresh start, that is good.

It then goes on to explain how they are trying to avoid making more losses after having their third consecutive year of losses. Michael Kimberley, its latest chief executive, has come up with some "radical" plans to restructure Lotus. This includes more product range, more penetration into the China market and forging links with strategic partners. Also, car lovers, be prepared for the arrival of the Eagle, a new model from Lotus, at the end of next year. This is pretty good stuff.

The article however ends with this

Even if the restructuring goes according to plan, however, Proton's board has been warned that Lotus has no prospect of returning to profitability before the 2008-09 financial year. [Source: FT.com]

Dei, macha, thinking what I'm thinking? That means another few more years without profits from Lotus to Proton. I smell some panic in the Proton board already to push for the new partner, which is likely going to be Volkswagen. According to FT, it is "very close" to striking a deal with Proton.

How would this affect Lotus? Honestly, I don't know. But one thing is for sure, Volkswagen sure knows how to manage car companies better than Proton does. Don't deny this fact. Look at the miracle turnaround they did for Skoda Auto, and don't forget that they own Bentley, Bugatti and Lamborghini. I say this would be a strategic partnership, given Volkswagen's track record of managing the above sportscar makers.

Lotus definitely needs some injection of expertise in business 101 from Volkswagen. As for Proton, you really need to rethink of your position as a car maker. From the current viewpoint, Proton is surely lagging behind many international car makers, badly!

So, fellow Malaysians, still proud that we own Lotus? What say you?

References:

1. Lotus to blossom as owners given fresh start, John Griffiths, March 23 2007, FT.com.
   
2. Volkswagen nears Proton deal, Assif Shameen, March 19 2007, FT.com