The groundwork on the sub brand of Proton and Lotus is expected to commence soon.Read the full news from The Edge below.
PROTON, LOTUS TO PRODUCE SUB-BRAND CAR.
KUALA LUMPUR: National automaker Proton Holdings Bhd is looking at producing a sub-brand car, partnering with its wholly owned Lotus Group International Ltd, sources familiar with the matter said.
The Edge Financial Daily understands that a meeting was held between top officials of the two companies about three weeks ago, and a decision to manufacture the sub-brand car was made.
“Proton is a mass-market car (manufacturer), while Lotus is high-end… what they are looking at is something just below the Lotus level, something in-between, which will cater to a different (market) segment,” a source said.
The groundwork on the sub brand is expected to commence soon, but details such as when it will hit the streets are still uncertain.
According to sources familiar with Proton, the new sub-brand vehicle will incorporate more traits of Lotus than of the former.
Industry players said the proposal had its merits but were unsure of what the outcome would be for Proton as things were still at a preliminary stage.
“This could be similar to what the Volkswagen group does. It has under its banner the super car Lamborghini and high-end Audi; followed by the Volkswagen, which is one rung below; and both the Skoda and Seat as its lower offerings.
“The Audi, Skoda, Seat and Volkswagen have similar parts but a differentiated interior. Volkswagen took over the companies with some heritage.
“Proton is coming out with something new, so it may be more difficult… but in the end, it is a question of marketing,” an industry source said.
Germany’s Volkswagen AG controls Italy’s Lamborghini SpA, Skoda Auto AS of the Czech Republic, Audi AG of Germany, and Seat (Sociedad Española de Automóviles de Turismo) of Spain.
For its fiscal year ended March 31, (FY10), Proton posted a net profit of RM239.09 million on the back of RM8.23 million in revenue.
In FY09, it suffered a net loss of RM301.81 million on RM6.49 billion in sales. Earnings per share for FY10 stood at 43.5 sen, while the company’s net asset per share strengthened to RM9.75 from RM9.29 of the preceding financial year-end.
In the notes accompanying its financials, Proton said the better performance was a result of more sellable models, with better profit margins and write backs of impairment of property plant and equipment.
It is also noteworthy that Proton could quite easily fund the development of the sub-brand car with its cash, bank balances and deposits of RM1.65 billion as at end-March this year.
The company’s trade receivables amounted to RM898.73 million. Notably, in FY10, Proton received RM44.39 million from the Automotive Development Fund and RM99 million in a research and development grant.
Proton closed four sen lower at RM4.45 last Friday.