Proton’s acquisition of an 80% stake in Lotus in October 1996 is well-known, however why did Malaysia’s first carmaker provoke the deal? At Lotus Automobiles Malaysia’s thirtieth anniversary celebration not too long ago, Tengku Tan Sri Mahaleel Tengku Ariff, former CEO of Proton, shared his insights into the deal that reworked the corporate.
In his account, Mahaleel mentioned ten days into his tenure at Proton in 1996, he was requested to current to then prime minister Tun Dr Mahathir Mohamad on April 30 a strategic plan with the intention of creating Malaysia a developed nation. To be particular, the purpose was to create Malaysia’s first homegrown mannequin that was developed by Malaysians and constructed regionally.
“I introduced to Mahathir for an hour. After that, he by no means requested a single query. I mentioned, on the final web page, we will do the outdated means, which is rebranding, take any individual’s model and stick a Proton [logo] on the bottom or the entrance and also you name it our Malaysian automotive,” mentioned Mahaleel.
“The opposite is to do it your self. And that essential day within the morning, he made that call: we make our personal automotive. Once we make our personal automotive, in one of many charts that I put up, was to undergo a consultancy, which isn’t solely pricey, however you don’t get the know-how as a result of all consultants preserve 20-30% of know-how hidden from us. So, you can’t entry it,” he continued.
“For those who purchase an organization, you may go straight into the database of what the corporate has. The 2 firms that have been chosen was, at the moment, Porsche and Lotus. Why do that?” he added.
In keeping with Mahaleel, Lotus not solely had passenger automotive know-how but additionally data gained from competing in Method One. The latter wasn’t Porsche’s robust go well with, and the German outfit wasn’t on the market, which meant Lotus was primarily the main and solely possibility. Many years in the past, Lotus went by means of tumultuous occasions after the demise of founder Colin Chapman in 1982 and a number of possession modifications (Basic Motors and Romano Artioli).
Following the acquisition of Lotus the place Proton bought an 80% stake for 51 million British kilos, Mahaleel revealed that Proton additionally secured Michigan Motor Analysis and MV Agusta. “We now had throughout the group, we will take a look at powertrains, we will do Method One, we will do passenger vehicles and engines, and we’ve got motorbikes,” he mentioned.
“We ultimately had nearly 2,000 analysis engineers worldwide. And don’t ever underestimate that Lotus saved Proton, per challenge about half a billion ringgit,” he added.
Persevering with, Mahaleel mentioned someday in April that 12 months, he was tasked to develop Malaysia’s first homegrown automotive and have it roll off the meeting line within the 12 months 2000. He famous that this was a problem, as Mitsubishi, which Proton partnered with to rebadge earlier fashions, analysed Proton and located that the native firm might solely do drawings and clay fashions.
“We’ve got no know-how in crash testing, electronics, engine administration methods, making the engine, we had no know-how. Nevertheless, inside three years with the assistance of Lotus and the opposite firms we purchased, we have been in a position to launch the automotive, Waja, and have become the eleventh nation on the planet that might make its personal automotive,” mentioned Mahaleel.
The Waja was certainly the primary Malaysian-designed automotive, nevertheless it nonetheless used a Mitsubishi platform, particularly a modified model of the one discovered within the Carisma (additionally shared with the primary Volvo S40). Proton later launched its personal platform with the Gen 2 in 2004, along with its personal engine, the CamPro.
He added the Chinese language firms corresponding to Geely and Chery had approached Proton for a partnership on the time as a result of the Malaysian carmaker was seeking to go to China. Nevertheless, Mahaleel mentioned this didn’t undergo as a result of this was a nationwide challenge that isn’t nearly making a automotive however creating empowering Malaysians with the know-how.
On how Proton benefitted from Lotus, Mahaleel mentioned Lotus was distinctive in that its vehicles have been very light-weight because of the revolutionary chassis it developed made from extruded aluminium sections joined by adhesive and rivets.
“Throughout that point, three of the European engines that have been designed for various manufacturers have been Lotus engines. Have you learnt that the CamPro is a really distinctive engine? You don’t know. There’s a variable valve timing,” mentioned Mahaleel.
Regardless of Lotus itself principally utilizing Rover/Toyota engines on the time, it did make its personal engines earlier than. Lotus Engineering was a preferred powertrain improvement consultancy agency in that period, even working with Porsche on its VarioCam Plus system. Lotus’ patented Cam Profile Switching tech (a variable valve timing system) fashioned the idea of Proton’s CamPro and later CPS engines. CamPro remained in manufacturing in varied kinds (together with the turbocharged CFE variant) till the top of 2025, final used within the Persona, often called the CamPro VVT.
Mahaleel went on to disclose that Proton was growing a hybridised Wira in 1997 and that the corporate was experimenting with hydrogen vehicles. He mentioned {that a} Wira hybrid by no means got here to market as a result of the price of the hybrid battery was too excessive on the time and that Malaysia lacked the uncooked supplies. He added {that a} Wira hybrid would have retailed for nearly RM80,000 or RM90,000, which might not appeal to many consumers.
On the flipside, Lotus discovered from Proton how you can assemble vehicles correctly, notably in the case of pace. Proton discovered how you can produce autos rapidly not simply from Mitsubishi but additionally Toyota for the just-in-time manufacturing system.
“Lotus, they are saying we lose cash. Lotus saved us half a billion ringgit per automotive. As a result of Mitsubishi, one platform, fees us RM500 million. We design it, it belongs to us. We are able to promote this platform to another folks,” mentioned Mahaleel.
He went to say that Proton and Lotus engineers engaged in data switch, with the previous group spending extra time to study from the latter. This consists of automotive design, with Mahaleel namedropping Azlan Othman, present chief designer for Proton, as being one of many “college students” that frolicked studying from Julian Thomson, the designer behind the Elise and Exige.
“By and enormous, inside three years of this acquisition, this deep data was the important thing success issue for Proton as a result of they may entry and work collectively,” mentioned Mahaleel, who added that he fashioned a world crew and never simply purely a Malaysian one.
“We made RM1.3 billion 3 times throughout my time. The very best earlier than my time was RM300 million odd per 12 months. In case you have no idea, each automotive challenge was paid with money, no borrowing, zero. We paid the federal government debt of RM1 billion. It was paid up two years earlier. We purchased Lotus money. We purchased MV Agusta money. We purchased Michigan Motor Analysis money,” recalled Mahaleel.
In the long run, Proton owned 100% of Lotus by 2003, and in 2017, DRB-Hicom (by then the dad or mum firm of Proton) offered 51% of Lotus to Geely, whereas the remaining 49% went to Etika Automotive, a Malaysian firm.
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