CHINESE auto maker Zhejiang Geely Holding Group (Geely) has agreed to buy ailing national carmaker Proton from DRB-Hicom, beating out rival bidder PSA Group.

Geely, which controls Hong Kong-based Geely Automobile and Sweden’s Volvo Car Group, will acquire a 49.9% stake in Proton. It will also buy Proton’s entire stake of 51% in Lotus Advance Technology Sdn Bhd.

Proton parent DRB-Hicom’s board met to discuss the bids with the group last week and yesterday asked the Bursa to suspend trading in its shares, pending an announcement.

Geely outbid PSA, the French maker of Peugeot and Citroen, Renault, and Japan’s Suzuki Motor Corp to ink the heads of agreement with Proton in Putrajaya. Both parties have agreed to sign a definitive agreement before the end of July, said a joint statement from DRB-Hicom and Geely today.

Proton has been a loss maker despite receiving more than US$3 billion (RM13 billion) in subsidies since its founding in 1983. Last year, it received RM1.5 billion in government aid on condition that it pursue a turnaround plan and seek a foreign partner.

Proton company has two plants in Tanjung Malim and Shah Alam with an annual capacity of 400,000 cars.

Geely sold some 1.3 million vehicles last year, and has 16 manufacturing plants, seven design studios and five research and development centres.

Geely’s investment will help Proton grow its sales overseas and recover some of the global presence it has lost in recent years. – May 24, 2017.