By Veeno Dewan
“The Geely Holding Group based in Shanghai under the leadership of Chinese billionaire, Li Shufu, recently bought a controlling stake in the Lotus Company of around 51 percent.”
In the same way that Indian owned conglomerate, TATA has rescued and breathed new life into esteemed British automakers Jaguar and Land Rover, the Chinese company Geely is now doing the same with Swedish car maker Volvo and British sports car manufacturer Lotus Cars. The Geely Holding Group, based in Shanghai under the leadership of Chinese billionaire, Li Shufu, recently bought a controlling stake in the famous Lotus Company of around 51 percent. The aim is to turn the hallowed car company around to a profit in the same way it has done for Volvo in the last few years. Geely Holdings bought Volvo in 2010 and has surprised the auto industry with the way it had increased the brand’s presence, launched new vehicles, and taken Volvo into profit. Auto analysts say the company’s turnaround is due to the handoff management style at Geely that allowed Volvo to keep its engineering and executive talent at Volvo and gives them free rein to develop a new product. In 2016 under Geely, Volvo achieved good sales and has now embarked on a program to move to an all-electric or hybrid lineup within two years.
The recent deal with Geely to buy a majority stake in Lotus Cars is heralded as a smart move by the Chinese company. Lotus Cars, a specialist Sports Car maker, has been making race cars and high-performance coupes for 65 years. Its vehicles have graced James Bond movies and won numerous racing car championships with such drivers as Ayrton Senna and Mario Andretti. The company, due to its expertise in engineering and innovative design in the fields of weight saving, aluminum, fiberglass, and carbon fiber technology has also consulted in high profile engineering roles with clients such as General Motors, Aston Martin, and Tesla. With this deal, Geely also gains access to Lotus Engineering, the sister company to Lotus Cars, which still operates as a consultancy for other automakers. With decades of experience with lightweight materials and architectures, vehicle handling, suspension optimization, efficiency, and electronics, Lotus Engineering has been influential in the development of cars such as the original Tesla Roadster, and many other mainstream cars. The Geely deal now means that Geely can now use Lotus engineering for itself. The timing of the Geely buyout is right, for, after years of struggle, Lotus is back to success, making high-end limited edition performance cars that do very well in its home U.K market. In the first half of 2017, Lotus entered profitability with sales rising by 10 percent, with its Lotus Elise SportsCar a credited success. Thanks to the Geely deal, and new investment, some new Lotus cars are projected to arrive in the next few years. Geely will not be content with Lotus being just a limited volume small bespoke automaker. It is possible that Lotus may end up making performance orientated hybrid or all-electric four-door sedans and SUVs in the future.