As I said in last night’s piece, ‘Why Lotus’ future is far from safe’, Proton has been working on securing a platform sharing deal with a major automotive partner.
Most people assumed this would be Volkswagen, who have been trying to either acquire or partner with Proton since 2007. Proton’s parent company, DRB-Hicom, already assemble Volkswagen cars at its Malaysian plants, so the tie-in for a collaboration with Proton was the logical move.
DRB-Hicom/Proton is dwarfed by the German car maker (US$1.5 billion compared with US$91 billion) and would have been very much the ‘serving’ partner in such an arrangement.
The Japanese car maker has fallen behind its competitors, faring badly in the Japanese earthquake and tsunami of 2011 – Its supply chain was severely disrupted, cars were lost and customer promises were broken. Adding to its woes, Honda has dropped behind Toyota and Nissan as a sporting brand, where once it dominated both with its involvement in F1, association with Ayrton Senna and the mastery of its supercar-slaying NSX sports car.
When we reviewed the Twelve Most Valuable Automotive Brands of 2012, Honda was the only company which had ‘dropped’ in value – by 11% since 2011 – so they clearly have the most to gain from such a partnership with Proton.
Even so, Honda are no small fry, with an annual production (of cars, bikes and OEM engines) of some 50 million units, compared to Malaysia’s total automotive output of just 600,000 units.
Honda needs to the risk-free spare production capacity held by Proton – at its underutilised Tanjung Malim plant, it also needs to lower the costs (and speed up the process) of its new-product development activities by sharing platforms and facilities with another car maker.
We understand both companies will also work on a new joint engine, while collaborating on the development of EV and Hybrid powered models, but the agreement at this stage is non-exclusive, and doesn’t appear to prevent Proton from entering into collaborations with other global OEMs. The reason for this may be due to the speed at which this agreement was inked, and we assume it will evolve into a longer-term strategic partnership between both companies.
Then of course there’s Lotus.
With Honda’s new NSX scheduled for a 2015 launch, there’s still time for their engineers to work with the talented chassis people at Lotus. Lotus on the other hand, have had to scrap most of the work done in developing the new Esprit, which was designed for a very different cost base than the reality they now face under their new owners.
Likewise the Esprit was designed as part of a five-model offensive (platform sharing in practice within Lotus), but with that no longer being feasible, the Esprit was more than likely to be canned (despite what they optimists have been saying) unless Lotus could find a way of sharing its develoment with another car maker.
If Lotus and Honda are now able to collaborate, the volumes offered by an NSX platform could once again make the new Esprit feasible – provided Lotus’ turnaround plan is agreed by the company’s lenders.
In the statement from DRB-Hicom this morning, the company said “Having a strong and renowned global automotive player like Honda as the foreign strategic partner to Proton will provide Proton and the DRB-Hicom group with the opportunity to grow as an original equipment manufacturer (OEM) as the opportunities are endless.
“This collaboration will provide positive impact to Proton and the DRB-Hicom group in the long run.”
Let’s see, but clearly this is the first sign that Lotus might actually have a future after all.