Geely is said to mull US$1.9 bil revival plan for Lotus cars

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BEIJING (Aug 9): The Chinese owner of Lotus Cars is considering an investment of at least 1.5 billion pounds (US$1.9 billion) to revive the iconic British brand featured in James Bond movies, according to people familiar with the matter.

Zhejiang Geely Holding Group Co, which also controls Volvo Car Group, plans to add production facilities and research centres for Lotus Cars in the U.K., one of the people said, asking not to be identified because the deliberations are private. Geely is also in talks to increase its 51% stake in Lotus with its Malaysian partner Etika Automotive Sdn Bhd, which holds the remainder, another person said.

A spokesman for Geely Group didn’t immediately respond to an email seeking comment, while calls to the office phone line of privately held Etika Automotive weren’t answered.

The investment plan is part of Billionaire Li Shufu’s grand vision to transform Geely into a leading automaker rivaling Toyota Motor Corp and Volkswagen AG. Li’s group acquired Volvo in 2010 and spent more than US$11 billion to modernize its factories and help turn around the Swedish brand. In February,
Li emerged to be the biggest shareholder in German luxury-car maker Daimler AG with an almost 10% stake.

Under Geely’s proposal, the first phase would involve an expansion of Lotus’s Hethel plant with the hiring of 200 engineers, according to one of the people. Later, it plans to set up a second factory in the U.K., potentially in the West Midlands region, and add a new design and innovation centre
possibly in Coventry, the person said.

Geely acquired the Lotus stake from Proton Holdings Bhd last year, when it also announced buying 49.9% of Proton.

Li said last year that Geely would consider producing Lotus sports cars in China. The Chinese carmaker is hoping to build Lotus as a luxury nameplate that competes with Porsche and Ferrari.