File picture: Edgar Su / Reuters.

Kuala Lumpur, Malaysia - Geely has agreed to buy a 49.9 percent stake in Proton, in a deal aimed at reviving the loss-making Malaysian carmaker, but the deal could also open the door to other interesting possibilities.

For starters, the deal gives Geely, which already owns Volvo, full ownership of Lotus, which Proton owned until now. Does this mean the embattled British sports car maker could be in for a revival, backed in one way or another by Volvo technology? It's all pure speculation for now, but it is certainly possible.

Potential access to the Geely and Volvo parts bins could also give Proton a much-needed lifeline, while Geely will benefit by gaining a stronger presence in Southeast Asia.

Malaysia has been trying to resuscitate its formerly state-owned automaker for years. The company was privatised in 2012 but its market share dwindled to around 12 percent last year. 

Protons were imported to South Africa by AMH between 2005 and 2015. The brand was discontinued locally due to the exchange rate and low sales.

Second Finance Minister Johari Abdul Ghani, who witnessed the signing ceremony, said the deal will give Proton "a real chance of making a comeback, a huge one I hope."

He said Proton needs better economies of scale to compete and lacks the capital to invest in new technology. 

Johari said Proton will remain Malaysia's national car, with current owner DRB-Hicom keeping a 50.1 percent controlling stake in the company.

AP & IOL

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