Currently reading: Lotus told: ‘Keep going’
Parent company’s new owner backs Lotus’s five-year plan
Autocar
News
2 mins read
7 March 2012

Lotus boss Dany Bahar has been ordered to continue the five-year programme he devised two years ago to replace the entire Lotus model range, even though Malaysian parent company Proton is in the process of being acquired by a new owner, DRB Hicom.

Progress at Hethel will slow over the next two months, Bahar says, because Malaysian law entails a 60-day change-of-ownership process, during which time Lotus will not have access to previously agreed Proton funds. This will also result in some delays in the development of the new models, which could set back the launch date of the new Esprit by as much as six months, as well as creating shorter delays for the Exige S and Evora GTE.

“We have explained our plans to the new owner,” the Lotus CEO told Autocar in an exclusive interview, “and have been told to keep going as we are. The immediate problem is to manage the cash in the business carefully during the 60-day pause, but I am confident that this is a temporary technical issue.”

Proton’s new owners are reportedly “open” to talks about the sale of Lotus, but Bahar dismisses as speculation suggestions the company is close to being sold to one of a number of supposed suitors, including the Luxembourg-based private investment company Genii, which already owns the Lotus F1 team.

“To the best of my knowledge, no one is about to buy the company,” said Bahar. “You’d have to consider the market implications before deciding to sell. Right now we have crazy demand for the latest Exige — 383 orders already. The Evora GTE will be homologated by May, and we have 200 orders for that. Things are looking really promising.”

Lotus is now more than two years into its five-year plan, Bahar pointed out. “Our new gearbox is on the dyno and our new V8 supercar engine is running and progressing on schedule. We will have supercar prototypes to test in May. We’ve spent so much money already that it would be silly to write it off.”

Steve Cropley

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curious_insider 16 February 2012

Re: Lotus told: ‘Keep going’

Ravon wrote:
Curious Insider, I always look forward to your posts, as when it comes to Bahar's excesses you always seem on the money. The total sales figure you quote of 1458 cars in 2011 seems from memory about one thousand short of the figure Bahar gave to Steve Cropley in a recent interview for this magazine. Maybe that fits neatly in line with the "in-house designed modular V8 engine" which is actually an old DTM engine from HWA in Germany, and say a great deal about his faith in his "world renowned design consultancy". I see today that Lotus are sponsoring and thus renaming a top German Formula 3 Team, there is some interesting speculation on one of the F1 Blogs about the "commissions" from all this sponsorship, lets hope that is pure speculation and follows the well beaten path of complete integrity shown so far. Anyway I'm off to Regent Street to the Lotus Store to buy some "leather goods".

thanks. Those figures are from SMMT, so as declared by Lotus at ytd December 2011.

The Colonel 16 February 2012

Re: Lotus told: ‘Keep going’

gussy51 wrote:
the market for top end sportscars remains strong thanks to increased demand from places like China, and this is the market Lotus is going into.

Interestingly following the opening the Beijing showroom (which is gorgeous by the way), Shanghai, Chongqing and Guangzhou were also supposed to open in 2011, but didn't (as well as the opening roll out for 2012 being scaled back). I'm sure that they will come (though I'm honestly suprised that Shanghai didn't come first), but Chengdu came next in January this year.

To put that in some context, that is like opening your fist dealership in, say, Kensington, and then following it up with Basildon. It's odd. The claim (not by Lotus to be fair) is that such "second-tier" cities are where the greatest levels of conspicuous consumption go on; is this a path that Lotus, the parent, want to go down though?

gussy51 16 February 2012

Re: Lotus told: ‘Keep going’

curious_insider wrote:

.....would you invest?

I only wish I had to find an answer to this question in reality!!

What I would say is I would be skeptical about investing in the current plan without some very thorough and convincing figures to prove that it is viable. Otherwise there would need to be changes.

As I see it from a financial point of view trying to sell cars profitably in small volumes in the £25,000 - £45,000 price band is a thankless task. I love the idea of the Elise successor shown at the 2010 Paris motorshow but I doubt it can be profitable, so I would replace all the small cars with something lower volume and much closer to its track day competitors i.e. harnesses rather than airbags etc.

I would then concentrate on the Evora and Esprit in the short to medium term with the hope of adding the Elite in the medium to long term using funding created largely by profits. I think Lotus needs to produce three model ranges with two body variants each to keep sales consistently high over a 6 year product cycle (so there is always one new model each year).

However my thinking isn't so different from the current plan, basically just cut back the city car, Eterne and the volume and more mainstream Elise replacement, and the plan looks significantly more manageable, and potentially very profitable.