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Proton has signed a three-way agreement with former partner Goldstar Heavy Industrial Co Ltd and authorities in Quanzhou, Fujian Province, China to produce cars and engines in that city, has reported, citing Shanghai’s China Business News.

Under the agreement, Proton plans to set up a production base for Lotus-badged cars, as well as an R&D centre, in Quanzhou. Once production happens, it could spell the end of Zhejiang-based Youngman-Lotus, which saw its six-year joint-venture deal with the Malaysian carmaker expire in 2012.

This is actually the second time Proton has inked a deal with Goldstar, which primarily produces light buses and machine tools. The two companies began a legal tussle in 2008 that led to the contract’s termination in 2010, by which time Proton was already into the fourth year of its joint-venture with bus- and truck-maker China Youngman Automobile Group.

The joint-venture, called Youngman-Lotus, saw the production of Protons Gen 2 and Persona, as well as Campro engines in China. The line-up included L3 hatch (Gen 2), L3 sedan (Persona), L5 (stretched Gen 2 platform) and T5 (SUV based on Gen 2 platform, not known if ever went on sale).

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The cars were sold in the People’s Republic under the Youngman-Lotus and Europestar brands. The ‘Lotus’ involvement here is in fact limited to Lotus Engineering, a Proton subsidiary that offered design and technical support to Youngman.

A source told that although Youngman has said that the technology in its joint-venture came from Lotus, it was not from the British sports car maker and that the Chinese company had not invested nor gained much from the deal.

Car dealers are not optimistic, either. According to the report, some say that even if Youngman-Lotus manages to restart production, its products are no longer competitive in the market, while others say they are no longer willing to work with Youngman-Lotus as the carmaker has failed to settle its debts.

Proton also had a brief dalliance with Beijing-based Hawtai Automobile in 2011 – the original deal was to manufacture the Exora and P3-21A sedan (which of course became the Preve) in China, but this did not progress beyond the MoU stage. More recently, the Malaysian carmaker explored a possible collaboration with Geely.

The real ‘Gold Star’: Youngman-Lotus L3 GT at Auto China 2014