China car production marks gear change for Group Lotus

Chairman of DRB-HICOM Group, Dato’ Syed Mohamad Syed Murtaza (seventh from left) was present with Bo

Chairman of DRB-HICOM Group, Dato’ Syed Mohamad Syed Murtaza (seventh from left) was present with Board and Senior Management of PROTON together with Lotus and Goldstar to witness the occasion. Picture submitted - Credit: Archant

Group Lotus will no longer just manufacture British sports cars after shaking hands on a deal to kick-start production in the Far East.

Lotus Elise S Cup. Picture submitted

Lotus Elise S Cup. Picture submitted - Credit: Archant

The Hethel-based firm's Malaysian owners have signed a joint venture agreement which will see a 'Lotus branded passenger car' built and sold in China.

But the contract between Lotus Group International Limited and Goldstar Heavy Industrial Co Limited will not include the company's sports car range, with production of the Evora, Exige and Elise remaining at its headquarters in Norfolk.

Lotus chief executive, Jean-Marc Gales, hinted in March that the firm may look to break into the more mainstream car market by creating a four-door Lotus SUV to rival luxury car brands such as Bentley and Aston Martin.

He said China had emerged as the company's top key growth market for exports and expected it to expand even faster in the coming years.

Lotus near Hethel . Steve Adams

Lotus near Hethel . Steve Adams - Credit: Archant

It follows the announcement earlier this month that the company had recorded its best sales performance for seven years to the end of the 2014/15 financial year, selling 2,015 vehicles compared to 1,296 the year before.

Sales in China grew by 186pc from 28 to 80 over the same period.

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Dato' Abdul Harith Abdullah, the chairman of Proton, said: 'The JV Agreement will see the establishment of a new JV Company for the purpose of undertaking research and development (R&D) activities in the use of efficient and advanced technology. The JV Company will then produce and sell Lotus branded passenger cars as well as provide after sales services in connection with its products in the People's Republic of China.'

The joint venture agreement was sealed by Proton Holdings, the ultimate holding company of the Lotus Group. Both companies are subsidiaries of parent company DRB-HICOM Berhad.

The deal will accelerate the development of Lotus cars in the premium sports segment in China underpinned by incentives from Fujian Provincial Government, the company said. The new cars will be built at a factory in the Fujian province.

He added: 'The automotive market in China is the single largest in the world today, and is still growing, therefore it is only natural for an established iconic company like Lotus to embark upon the possibility of expansion, venture into the market and seek the available opportunities, in light of the keen interest shown by the many inquiries received thus far. It is very difficult to ignore the market and Lotus will fill the gap in providing a lifestyle alternative to the growing demands of the affluent and market conscious local community.'

In March, the firm launched the Evora 400 sports cars at the Geneva Motor Show.

The EDP Top100 firm plans to recruit 150 new staff – the majority in the region – as it looks to up production of all its models to 70 cars per week by the end of September.

Lotus, which cut 252 jobs in Norfolk last year to create a more efficient organisation, reduced its losses from £167.8m to £71.1m to the end of March 2014.