Proton Holdings has terminated its joint venture (JV) contract with China’s Goldstar Heavy Industrial to build and market Lotus cars in China, The Edge reports. Lotus Group International, also a party in the equity venture, has also issued a termination letter to Goldstar. In April 2015, the parties signed an agreement to accelerate the development of Lotus cars in that market.
In a filing with Bursa Malaysia, DRB-Hicom said the contract was terminated because the JV company, Goldstar Lotus Automobile, had failed to obtain the required manufacturing licence in China in time. The deadline to obtain this was September 25 last year, but it was then extended by both parties to December 31, 2017.
The licence was still not obtained despite the extension, DRB-Hicom said. It added that the parties will consider and agree on the next course of action under the equity JV contract, in accordance with Chinese laws.
The new company was established with the aim of producing and selling Lotus-branded cars, engines, parts and components as well as accessories in the republic.
Lotus Cars is of course no longer owned by DRB-Hicom. In May last year the conglomerate announced it was selling off Lotus in its entirety, with the sale to be accomplished in two blocks. In September 2017 it was announced that Zhejiang Geely Holding (ZGH) had completed the transaction for a 51% majority stake in Lotus, with 49% being held by Malaysian automotive group Etika Automotive.
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Another big waste of money. Don’t forget also the tens of trips made to China. Big huge rombongan sambil belajar flying Business Class and staying in 6 star suites. Each trip few million ringgit spent.
Such a waste of money. This is why Proton is losing money
Sounds like someone is a sore loser. Put it to you this way. No business deal is signed and gets going immediately. What more in a foreign country. Those trips are the CODBs always provisioned.
And a good businessman cuts his losses. That is what’s being done now. So pipe down and get a real job.
Well said, bro. U really put him in his place.
Too many business decisions gone bad. Goldstar, MV Augusta, VW, Lotus, Youngman, Tiara, R3, Iriz EV…. I guess its definitely not Proton mgmt’s fault.
Not at all.
Goldstar was a JV which never took off so din incur any losses and it was their fault, MV Augusta pulak was in deeper trouble under AMG – so u mean AMG mgmt taboleh pakai ke?, VW was a huge bullet dodged witnessing what happen during their acrimonious divorce with suzuki, Lotus pulak helped developed P1 cars & P1 ride and handling & Campro, Youngman pulak was quite a profitable venture but YM dropped the ball not P1 fault, Tiara was French car problem, R3- wait, whats the problem there?, Iriz EV too has no problems just waiting for market acceptance for a 80k Bsegment EV hatchback.
So which is P1 mgmt fault again?
ya, for all these trips, we need to bring our maid, our mother in law, our son, our son in law, our gardener, our neighbour.
yes, you are very right.
My advice to Proton, pls don’t waste time with next course of action with this JV.
If China wanted to do business with you, it would have got the approval already. You know China…they work fast. This is a message they are not interested.
Anyway, congrats to Proton for losing Lotus. This is what Geely wanted all along.
What next course of action are you talking about?? Its been dissolved.
Losing Lotus? You only lose something if you want to keep it. PROTON was either going to keep Lotus further away from expansion as they didn’t have the funds to put in, or let it thrive under someone else.
The best call was selling them and getting a keen price as well. At least Lotus now will have a real chance at prospering.
There goes Proton’s 1.28B market potential. 70k cars sold still bisnes viable.
Really? Have u forgotten about Geely?
Proton Persona LHD. lelong2
Speaking of Persona LHD, I saw a few when I was in Shanghai last month. Was really proud that time and took lotsa photos there.
Now that Lotus is owned by Geely, its no more P1 problem.
Lotus just turned profitable again. Oh wai
So is Lotus still partially owned by Proton?
Good. Time to move on. In Geely we trust.
Geely, Bao Teng, Lotus > all
Kahwin, cerai. Kahwin, cerai.
Lumrah business. Klau tak jadik, toksah teruskan…
Sejak bilo ada jv ni…kesian proton…asyik cerai je
Kesian. Tak pernah baca tu, hanya tau bash.
This is the second (!) time Proton terminated their JV with Goldstar. Yet again, it happened because Goldstar took too long to obtain a manufacturing license from the Fujian state government.
The last time Proton and Goldstar ‘broke up’ (around 12 years back), Goldstar didn’t take it too well. When Proton ended up working with another company (Youngman), Goldstar actually sued Proton for breach of contract. The whole case was heard in a court in Singapore, which found Proton not at fault, since Proton had given ample time for Goldstar to obtain the license.
That was 7 years ago. Will Goldstar sue Proton again ? I want to feel sorry for Goldstar, but they didn’t seem to have learned anything in the past few years; again, they were given 2 years to get the license, and again, they failed. Proton (and Lotus) gave Goldstar a second chance, but they blew it again. There will be no ‘third chance’ after this.
From Proton’s perspective, things have never looked clearer. Proton will re-enter the Chinese market through Geely, which already has many plants in different states all over China. There will be no licensing issues and unwelcome delays. Unlike Youngman, Geely is not reckless, and unlike Youngman, Geely succeeded in rescuing their Swedish partner (Youngman tried but failed to buy Volvo’s cousin, Saab).
If Goldstar wants to sue Proton (again)… then good luck to them. They’re going to need it. A LOT of it.
Google “forbes Geely” and read “If Any Chinese Car Company Will Take On The World, It’s This One”.
Believe me, it will change the way you look at Geely vs other Chinese car makers. You will understand why I have great faith in Geely family.
Proton is in good hand. In Geely we trust.
Pitiful business for a pitiful company. Geely products destined for bargain basement garbage bin in Somalia Laos Bolivia maybe. The lowest denominator of car makers. Pitiful for the country to have this company.
Well pitiful to Goldman but they asked for it. But yeah, i agree with u, pitiful for China to have such a scam company like Goldman. Luckily P1 went with Geely this time.