Proton Future development

Proton's Business Strategies

* Acquisitions

Lotus

In 1996, Proton acquired a 63.75% share in Lotus Group International Limited for £40,640,000. A later PriceWaterhouse Coopers audit would find that the CEO, Yahaya Ahmad, had inked the agreement on 16 October 1996. The agreement was presented to the board for approval on 27 November 1996. As part of the purchase agreement (signed prior to board agreement), there were restrictions placed on Proton's ownership of Lotus. One of the restrictions was a prohibition on diluting ACBN's remaining shareholding for a period of five years. This restricted Proton in its operation of the Lotus business and required Proton to guarantee a £40 million loan in 2000.

MV Agusta

In December 2005, Proton purchased a majority share in MV Agusta of Italy at 70 million Euro. MV Agusta was the manufacturer of MV Agusta, Husqvarna, and Cagiva motorcycles. A year later, Proton sold off its 57.7% share in MV Agusta to Italy's GEVI Spa for a token of 1 Euro. Due to heavy debt by MV Agusta, the selling enabled Proton to write off the losses off its book. But the buyer would assume the 107 million Euro ($174 million) in debt. In August 2007, GEVI SpA the company that bought over MV Agusta for 1 Euro sold the brand Husqvarna and its factory to BMW for a reported 93 millions euros leading to speculations by the Malaysian public of bad management of the company's board of directors resulting in further loss of reputation for the company.

* Strategic Partnership

Abortive strategic partnership with Volkswagen AG

In October 2004, Proton announced that an understanding had been reached with Volkswagen AG of Germany to establish a strategic partnership. Under the tie-up, the two carmakers were expected to exploit each other's strengths. Proton would gain access to Volkswagen's superior technical capabilities and technology. In return, Volkswagen would utilise Proton's spare capacity at the latter's Tanjung Malim plant to assemble cars for export to the South-East Asian market, where the German auto giant had a weak presence.

On 13 January 2006, Volkswagen finally announced that negotiations about the partnership had failed because VW's desires clashed with the terms and conditions offered by Proton. VW were more interested in eventually controlling Proton Holdings rather than just being a strategic partner. Despite this, Malaysian news announced that Volkswagen AG has signed an agreement to buy a 51% share in Proton on 26 January 2007, which turned out to be unfounded. Throughout most of 2007, rumours about continuing merger talks with Volkswagen, and occasionally General Motors surfaced in the local press and at briefings given by top government officials.

Finally however, on 20 November 2007, Proton announced that talks regarding any partnership with Volkswagen had ended with immediate effect, citing improving sales over the year, a favorable export outlook and confidence in management turning around the company without external collaboration. This unexpected announcement resulted in a 19% overnight drop in Proton's share price to their lowest value in seven years, due to the market's perceived uncertainty about the future financial viability of the company in an increasingly competitive local and world market

Partnership with Detroit Electric

On 2 September 2008 Detroit Electric announced plans to progressively roll out affordable electric vehicles worldwide by the end of 2009. Proton cars are to be used and tested in order to validate Detroit Electric's technology and explore the potential to collaborate to create a range of pure electric cars. Detroit Electric has to date integrated its electric drive systems into Proton's Lotus Elise and two Proton passenger cars. Detroit Electric hoped to collaborate with Proton to sell electric cars for the Southeast Asian market or to use Proton's existing manufacturing platform to produce electric cars under the Detroit Electric brand. The company planned to roll out 30,000 electric cars by 2010, as he demonstrated their performance at a Proton test circuit in Shah Alam, west of the capital Kuala Lumpur.