http://www.eveningnews24.co.uk/cont...=ENOnline&itemid=NOED19+Apr+2004+11:57:50:847
Speculation mounts over Lotus
April 19, 2004 11:57
NORFOLK-based Lotus today played down speculation sweeping the Far East that it is to be sold off by parent company Proton.
The rumours follow news that a business review of the Hethel-based company has been carried out.
Industry experts have interpreted this as a sign that Proton, Malaysia's national carmaker and Norwich City's shirt sponsor, want to sell Lotus off because of financial problems.
But Lotus today dismissed the rumours.
Spokesman Alastair Florance said: "They have no intention of selling off Lotus."
He added: "In the last two years we have been trading profitably.
We have launched cars into new markets such as Mexico and Japan and we have introduced the Elise into the United States of America, where we are expected to sell 2,000 cars a year.
"There has been a lot of work and a lot of investments and we are starting to reap the benefits."
Brian Collier, managing director Proton Cars UK, said: "I know nothing at all about this. As far as I know they are pure rumours."
Neville Chapman, county councillor for the area which covers Hethel, said he had been on a tour of the site only last week and had been told that Lotus were even hoping of increasing the size of its workforce.
"I was shown round there by the manufacturing director and I asked him if they were increasing staff and he said yes.
"So going by that visit I wouldn't envisage anything like this (a sell-off). Lotus is important for all of Norfolk."
Brian Watkins, Norwich City Council's executive member for enterprise, added: "I would be extremely worried if it were to be the case. It would have considerable implications."
Tim East, another south Norfolk county councillor, who speaks for the Liberal Democrats on economic matters, had also not heard of the rumours.
He said that Proton, who have their logo on the Norwich City home shirt and the Lotus one on the away strip, would benefit from the club securing promotion.
The club are even due to leave on a pre-season tour of Malaysia in the summer.
Mr East added: "If Norwich City are promoted to the Premiership the spin off would be £50million in terms of worldwide and European exposure.
"As Proton are the shirt sponsors, I can't imagine they would pull out at this moment.
"Even if sales are dropping now, if Norwich City do get up, then sales might sky rocket."
He added: "I'm a county councillor on economic development who lives in south Norfolk. I would be devastated if Proton, at such an opportune moment, pulled the plug. But even if they did, I wouldn't think it would be long before a major company came in and arranged a partnership with Lotus."
He pointed to the recent successful launches of the new Lotus Exige and a new version of the Elise in the United States, and speculated that the problems might not be on this side of the world.
"The deal is not just for Lotus it is also to sell Proton cars in this country. In my view it is not an attractive bargain for British customers because it is not a particularly beautiful car.
"One wonders if perhaps it is not the Lotus that is failing but the Proton side of the partnership."
Certainly, Proton is facing difficulties.
Last Monday, Malaysian Prime Minister Abdullah Ahmad Badawi said the company had "serious problems" and its share prices have been in decline.
It was formed 19 years ago at the behest of former Malaysian Prime Minister Mahathir Mohamad to spearhead the nation's push into heavy industries, but has been losing market share in the country.
Sales slumped 28 per cent in 2003 and its market share fell to 49 per cent from almost two-thirds in 1994, while other imported brands are increasing.
At the same time, it has not made major inroads abroad and the carmaker is thought to be seeking a foreign partner, with General Motors Corp and Ford Motor most likely.
The Lotus rumour started when Khazanah Nasional Bhd, the commercial arm of the Malaysian government and the biggest and controlling shareholder in Proton, admitted that "a total business review" had been carried out on the wholly-owned subsidiary Lotus Group International Ltd.
It has been widely interpreted in the Far East that Lotus is currently struggling.
Although this was vehemently denied by both Proton and Khazanah, the admission has left analysts believing, at the very least, the option of Lotus's disposal is being considered.
In a statement, Khazanah said the review was meant "to assess the current business situation and consider all available options to maximise shareholders' value."
The objective, it said, was to find ways to turn around the company and add value to Proton.
"The allegation of 'sizing up its British Lotus unit for a possible sale' is therefore not true," Khazanah said.
But reports in the Far East say that of Lotus's three divisions — engineering, manufacturing and car sales — only engineering is believed to be profitable.
Tom Barnard, motoring editor at Auto Express magazine, said the rumour sounded unlikely.
"Lotus only have one product (the Elise) so I wouldn't have thought they were worth very much. The engineering side is worth a bit. They have a few high profile contracts.
"I can't see them doing it unless Proton are really in trouble in Malaysia and I haven't seen any sign of that."
Lotus was acquired by Proton in 1996.
Before then, General Motors Corp held a major stake in Lotus from 1986.
Founder Colin Chapman had died four years earlier.
Speculation mounts over Lotus
April 19, 2004 11:57
NORFOLK-based Lotus today played down speculation sweeping the Far East that it is to be sold off by parent company Proton.
The rumours follow news that a business review of the Hethel-based company has been carried out.
Industry experts have interpreted this as a sign that Proton, Malaysia's national carmaker and Norwich City's shirt sponsor, want to sell Lotus off because of financial problems.
But Lotus today dismissed the rumours.
Spokesman Alastair Florance said: "They have no intention of selling off Lotus."
He added: "In the last two years we have been trading profitably.
We have launched cars into new markets such as Mexico and Japan and we have introduced the Elise into the United States of America, where we are expected to sell 2,000 cars a year.
"There has been a lot of work and a lot of investments and we are starting to reap the benefits."
Brian Collier, managing director Proton Cars UK, said: "I know nothing at all about this. As far as I know they are pure rumours."
Neville Chapman, county councillor for the area which covers Hethel, said he had been on a tour of the site only last week and had been told that Lotus were even hoping of increasing the size of its workforce.
"I was shown round there by the manufacturing director and I asked him if they were increasing staff and he said yes.
"So going by that visit I wouldn't envisage anything like this (a sell-off). Lotus is important for all of Norfolk."
Brian Watkins, Norwich City Council's executive member for enterprise, added: "I would be extremely worried if it were to be the case. It would have considerable implications."
Tim East, another south Norfolk county councillor, who speaks for the Liberal Democrats on economic matters, had also not heard of the rumours.
He said that Proton, who have their logo on the Norwich City home shirt and the Lotus one on the away strip, would benefit from the club securing promotion.
The club are even due to leave on a pre-season tour of Malaysia in the summer.
Mr East added: "If Norwich City are promoted to the Premiership the spin off would be £50million in terms of worldwide and European exposure.
"As Proton are the shirt sponsors, I can't imagine they would pull out at this moment.
"Even if sales are dropping now, if Norwich City do get up, then sales might sky rocket."
He added: "I'm a county councillor on economic development who lives in south Norfolk. I would be devastated if Proton, at such an opportune moment, pulled the plug. But even if they did, I wouldn't think it would be long before a major company came in and arranged a partnership with Lotus."
He pointed to the recent successful launches of the new Lotus Exige and a new version of the Elise in the United States, and speculated that the problems might not be on this side of the world.
"The deal is not just for Lotus it is also to sell Proton cars in this country. In my view it is not an attractive bargain for British customers because it is not a particularly beautiful car.
"One wonders if perhaps it is not the Lotus that is failing but the Proton side of the partnership."
Certainly, Proton is facing difficulties.
Last Monday, Malaysian Prime Minister Abdullah Ahmad Badawi said the company had "serious problems" and its share prices have been in decline.
It was formed 19 years ago at the behest of former Malaysian Prime Minister Mahathir Mohamad to spearhead the nation's push into heavy industries, but has been losing market share in the country.
Sales slumped 28 per cent in 2003 and its market share fell to 49 per cent from almost two-thirds in 1994, while other imported brands are increasing.
At the same time, it has not made major inroads abroad and the carmaker is thought to be seeking a foreign partner, with General Motors Corp and Ford Motor most likely.
The Lotus rumour started when Khazanah Nasional Bhd, the commercial arm of the Malaysian government and the biggest and controlling shareholder in Proton, admitted that "a total business review" had been carried out on the wholly-owned subsidiary Lotus Group International Ltd.
It has been widely interpreted in the Far East that Lotus is currently struggling.
Although this was vehemently denied by both Proton and Khazanah, the admission has left analysts believing, at the very least, the option of Lotus's disposal is being considered.
In a statement, Khazanah said the review was meant "to assess the current business situation and consider all available options to maximise shareholders' value."
The objective, it said, was to find ways to turn around the company and add value to Proton.
"The allegation of 'sizing up its British Lotus unit for a possible sale' is therefore not true," Khazanah said.
But reports in the Far East say that of Lotus's three divisions — engineering, manufacturing and car sales — only engineering is believed to be profitable.
Tom Barnard, motoring editor at Auto Express magazine, said the rumour sounded unlikely.
"Lotus only have one product (the Elise) so I wouldn't have thought they were worth very much. The engineering side is worth a bit. They have a few high profile contracts.
"I can't see them doing it unless Proton are really in trouble in Malaysia and I haven't seen any sign of that."
Lotus was acquired by Proton in 1996.
Before then, General Motors Corp held a major stake in Lotus from 1986.
Founder Colin Chapman had died four years earlier.
