VW-Proton deal to go ahead, but not with Lotus

Volkswagen's deal to buy-out troubled Malaysian car maker Proton is almost done, according to Wolfsburg insiders, but it seems as if the deal will not include Lotus, which is owned by by a different company.

VW's deal is to buy Proton's car manufacturing arm, but Lotus is owned by the umbrella corporation, Proton Holdings. At this point, Lotus isn't part of the deal, although it would certainly make sense to bundle the famous Norfolk-based sportscar company in with the package, as once VW owns the car bit, Proton Holdings doesn't have any other car interests.

Volkswagen wants Proton to secure a low-cost manufacturing base in the far east, that would allow it to develop a cheap 'World' car to rival Renault's successful Romanian-built Logan range. It's not yet known if VW will build cheap cars under the Proton name, but it seems unlikely as outside of Malaysia, few have ever even heard of the name. VW has a deep well of choices for budget brand names anyway. Apart from Skoda, it also owns the rights to NSU, DKW and Wanderer. Oddly, it also owns the rights to the Rickenbacker name, a little-heard-of American car company that was bought up by DKW in the thirties. Don't hold your breath waiting for a Rickenbacker dealership, though.

The move for Proton is a significant one though, as it signals VW's aims not only to compete effectively in emerging car markets, but also a way to reduce the group's overall carbon emissions. VW is currently top-heavy with expensive, high-emissions models thanks to its ownership of Audi, Bentley and Lamborghini, not to mention the fact that Porsche is the single biggest shareholder in VW now. If the EU enforces the 130g/km CO2 limit proposed for 2012, the VW could find itself exposed. A range of small, cheap, low-emissions cars selling in 3rd world markets could be just the thing to offset the grandee European marques' emissions.

As for Lotus, who knows? It could find a happy home at VW, and it would fit neatly into plans to make VWs and Audis more sporting and rewarding to drive, plus it could bring its new cheap hybrid technology to the table (see below "Lotus unveils cheaper hybrid solution"). If not, well, deep-pocketed Dutch supercar maker Spyker have shown an interest in buying Lotus. And, as they already own an F1 team, it could see the return of the famous green and yellow badge to the grid.