Will Lotus cars make it to 2015?
Discussion
Will Lotus cars make it to 2015? I’m thinking it’s going to be a struggle as in the last 12 months in the UK they only sold 410 cars. That’s not enough to bring in the required profit to spend on the development and manufacturing of the planned six new models.
Proton say they are only giving £100 million of capital to Lotus, so Lotus need to either make some profit or borrow the rest. Bear in mind they’re spending money like water on random things like GP2 sponsorship and the hiring of rapper Swizz Beatz. Who follows or cares for these activities?
McLaren has spent £250 million developing one model so Lotus needs cash to develop the proposed six cars, they say they need £850 million.
So my view is that they aren’t making much money, are spending more than they are earning and can only borrow so much between now and 2015. Therefore Lotus will go bankrupt before 2015 and we won’t see any of the new cars they’ve been shouting about. Anyone know something I don’t? Will Lotus be Chinese owned by 2015?
Zav
Proton say they are only giving £100 million of capital to Lotus, so Lotus need to either make some profit or borrow the rest. Bear in mind they’re spending money like water on random things like GP2 sponsorship and the hiring of rapper Swizz Beatz. Who follows or cares for these activities?
McLaren has spent £250 million developing one model so Lotus needs cash to develop the proposed six cars, they say they need £850 million.
So my view is that they aren’t making much money, are spending more than they are earning and can only borrow so much between now and 2015. Therefore Lotus will go bankrupt before 2015 and we won’t see any of the new cars they’ve been shouting about. Anyone know something I don’t? Will Lotus be Chinese owned by 2015?
Zav
The success of Lotus depends almost entirely on the continued support of Proton. They have kept the company afloat for over decade - without them Lotus would have gone to the wall years ago. They have underwritten Bahar's 5-Year Plan and Proton seem pleased so far. The first year delivered exactly as expected. This from Proton's 2011 Annual Report -
"For Lotus, FY 10/11 announced the “Dawn of a New Era” for Lotus Group of Companies. With the transformation programme in place, Lotus is in full turnaround mode. Initiatives are in place to ensure a positive change in culture and to attain operational improvements, whilst preserving the Lotus heritage and pedigree. Early signs are good with an 8% increase in revenue and 3% increase in sales. However, the most telling sign of improvement and innovation surely must have been Lotus’ unveiling of six brand new concept cars – from the effervescent Elan to the enigmatic Esprit, which was voted by critics to be one of the stars of the show at the 2010 Paris Motorshow.
It was also heartening to note that the Lotus booth was one of the most visited booths at the show, a true sign that Lotus is on the correct path. To further ensure that Lotus is moving in the right direction, an Advisory Council consisting of leading experts such as Mr Bob Lutz and Mr Tom Purves, was established."
In fact the Annual report does make interesting reading. Proton itself seems to be reasonably stable, reporting a (very) small profit despite the state of the world economy, heaps of awards and significant investment plans. It also promotes Lotus heavily, with over 10 pages devoted to Group Lotus.
http://www.proton.com/pdf/AnnualReports/2011Annual...
Even allowing for the marketing speak, I think we are in 'so far so good' territory but we all recognise there are difficult times ahead. No matter how good the strategy and management, the financial backing and the star advisors, the world economy could easily scupper the plans. Let's keep our fingers crossed.
"For Lotus, FY 10/11 announced the “Dawn of a New Era” for Lotus Group of Companies. With the transformation programme in place, Lotus is in full turnaround mode. Initiatives are in place to ensure a positive change in culture and to attain operational improvements, whilst preserving the Lotus heritage and pedigree. Early signs are good with an 8% increase in revenue and 3% increase in sales. However, the most telling sign of improvement and innovation surely must have been Lotus’ unveiling of six brand new concept cars – from the effervescent Elan to the enigmatic Esprit, which was voted by critics to be one of the stars of the show at the 2010 Paris Motorshow.
It was also heartening to note that the Lotus booth was one of the most visited booths at the show, a true sign that Lotus is on the correct path. To further ensure that Lotus is moving in the right direction, an Advisory Council consisting of leading experts such as Mr Bob Lutz and Mr Tom Purves, was established."
In fact the Annual report does make interesting reading. Proton itself seems to be reasonably stable, reporting a (very) small profit despite the state of the world economy, heaps of awards and significant investment plans. It also promotes Lotus heavily, with over 10 pages devoted to Group Lotus.
http://www.proton.com/pdf/AnnualReports/2011Annual...
Even allowing for the marketing speak, I think we are in 'so far so good' territory but we all recognise there are difficult times ahead. No matter how good the strategy and management, the financial backing and the star advisors, the world economy could easily scupper the plans. Let's keep our fingers crossed.
Edited by Hedgerley on Saturday 26th November 12:34
You’re all quite right that as Brits we should remain positive about Lotus’ future. The Press speak from Proton will always read positively as it’s a press release. So when the Lotus Press Manager is told, ‘our interiors are still poorly built, sales are below plan for 2011 and we can’t get any more power out of the Toyota engine.
The Press Release will say, ‘Lotus have improved the perceived cabin quality and the new model year has an extra 10bhp. Sales are above 2010.
Every car company and his dog has baked ‘massive growth in China’ in to their plans for the next few years, we’ll see which ones pull it off.
As you’ve all said there is a lot of good happening at Lotus and it’s wrong to try and shoot then down. However they make it so easy with their scattergun approach to marketing. They sponsor the Renault F1 team but their road cars have Toyota engines. Why didn’t they buy the Toyota F1 team at a knocked down price like Mercedes did with Honda. Add to that the licensing of the name to another F1 team and you can’t help but laugh.
Perhaps all is good at Lotus except for their marketing team!
The Press Release will say, ‘Lotus have improved the perceived cabin quality and the new model year has an extra 10bhp. Sales are above 2010.
Every car company and his dog has baked ‘massive growth in China’ in to their plans for the next few years, we’ll see which ones pull it off.
As you’ve all said there is a lot of good happening at Lotus and it’s wrong to try and shoot then down. However they make it so easy with their scattergun approach to marketing. They sponsor the Renault F1 team but their road cars have Toyota engines. Why didn’t they buy the Toyota F1 team at a knocked down price like Mercedes did with Honda. Add to that the licensing of the name to another F1 team and you can’t help but laugh.
Perhaps all is good at Lotus except for their marketing team!
xavierkx250 said:
They sponsor the Renault F1 team but their road cars have Toyota engines. Why didn’t they buy the Toyota F1 team at a knocked down price like Mercedes did with Honda. Add to that the licensing of the name to another F1 team and you can’t help but laugh.
Perhaps all is good at Lotus except for their marketing team!
Reference your point about Toyota, at the time, they had a development partnership with Toyota i seem to recall, and part of that deal was reciprocated with an engine supply agreement, because, at the time, the K series was nigh on extinct? The reason they didn't buy the Toyota F1 team was the fact that F1 (one of their greatest legacies) wasn't in their marketing plan, thus no interest.Perhaps all is good at Lotus except for their marketing team!
I'm watching with great interest on very development at Group Lotus, i think people have underestimated DB, when you consider the master stroke of getting Wolf Zimmermann on board, he's brought to life a completely new Lotus product from scratch, all within the allocated time frame, and it promises to be something succinct with the Lotus values, i personally can't wait to hear it! This will hopefully be another revenue stream for Lotus, as a crated engine to a 'smaller' manufacturer might be an option, or maybe they plan to shoehorn it into a mainstream production model? There alot in the pipeline and the marketing department isn't as crazy as you might think, after all, what are we all talking about?
Your comment about Mclaren and their development costs, they're starting a completely new model and facility within that budget and the timescale involved was actually longer than Lotuses? Vehicle development is what they do best, one of the best automotive engineering consultancies in the world.
Specialist sports car manufacturing is notoriously risky.
Unless Lotus as it is very well founded financially or incredibly effective as a business, both of which I doubt, the future MUST be bleak, at best.
Add to that the consequences of the most serious recession since the 1930's and the consequent reduction in the luxury goods market and the prospects look dreadful, at best.
I doubt Lotus will survive in its current form.
Unless Lotus as it is very well founded financially or incredibly effective as a business, both of which I doubt, the future MUST be bleak, at best.
Add to that the consequences of the most serious recession since the 1930's and the consequent reduction in the luxury goods market and the prospects look dreadful, at best.
I doubt Lotus will survive in its current form.
Having visited London recently the place is awash with £6 figure+ cars. But I didn't see one Evora or Elise.
Moving up market beyond the reach of people adversely affected by the recession would seem to be the only way forward.
'enthusiasts' talk a good game but tend to buy used anyway.
show offs can't wait to part with their money, pay daft premiums for the latest 'it' car (currently 458) and tend to get bored very easily, and in many cases buy a new car every year.
making cars for these people (also more likely to be impressed by Swizz Beatz than Kimi Raikonnen) might not be what enthusiasts want but it might be what Lotus needs.
Moving up market beyond the reach of people adversely affected by the recession would seem to be the only way forward.
'enthusiasts' talk a good game but tend to buy used anyway.
show offs can't wait to part with their money, pay daft premiums for the latest 'it' car (currently 458) and tend to get bored very easily, and in many cases buy a new car every year.
making cars for these people (also more likely to be impressed by Swizz Beatz than Kimi Raikonnen) might not be what enthusiasts want but it might be what Lotus needs.
The Pits said:
Having visited London recently the place is awash with £6 figure+ cars. But I didn't see one Evora or Elise.
Moving up market beyond the reach of people adversely affected by the recession would seem to be the only way forward.
'enthusiasts' talk a good game but tend to buy used anyway.
show offs can't wait to part with their money, pay daft premiums for the latest 'it' car (currently 458) and tend to get bored very easily, and in many cases buy a new car every year.
making cars for these people (also more likely to be impressed by Swizz Beatz than Kimi Raikonnen) might not be what enthusiasts want but it might be what Lotus needs.
I totally disagree. I think to survive Lotus needs to be at the cheaper end of the market. They are not prestige enough to be in the rich mans bracket (£100,000+). The Elise Clubracer/1.6 Elise imo should be £20,000 at the most. Good marketing and an affordable product will save Lotus. Look at all of the MX5s etc on the roads. I never see a Lotus. Normal punters believe that they are out of their reach, when they shouldn't be.Moving up market beyond the reach of people adversely affected by the recession would seem to be the only way forward.
'enthusiasts' talk a good game but tend to buy used anyway.
show offs can't wait to part with their money, pay daft premiums for the latest 'it' car (currently 458) and tend to get bored very easily, and in many cases buy a new car every year.
making cars for these people (also more likely to be impressed by Swizz Beatz than Kimi Raikonnen) might not be what enthusiasts want but it might be what Lotus needs.
doggydave said:
I totally disagree. I think to survive Lotus needs to be at the cheaper end of the market. They are not prestige enough to be in the rich mans bracket (£100,000+). The Elise Clubracer/1.6 Elise imo should be £20,000 at the most. Good marketing and an affordable product will save Lotus. Look at all of the MX5s etc on the roads. I never see a Lotus. Normal punters believe that they are out of their reach, when they shouldn't be.
They're still aiming at the 30k price point though, the new replacement Elise will be around 30k to 35k? Its all retrospective, when you think that well over 10 years ago, you could buy a new Elise for GBP22,400.00? Why should they price freeze for tight wads? If you can't afford one, don't buy one. Personally, i prefer to drive a Lotus because of its handling characteristics and the performance, as well as the rarity factor.doggydave said:
..an affordable product will save Lotus. Look at all of the MX5s etc on the roads.
The problem with that is that Lotus cannot now, and will never be able to make a car for MX5 prices. Hand glued aluminium chassis? Completely manual production line in the UK? Fibreglass bodies? These are all choices made because they cannot afford the sort of production lines and equipment that Mazda and Toyota can throw around. Those choice keep down the 'big costs' of being a car manufacturer (Toyota have invested more on a single factory upgrade than Lotus' entire budget for the next year), but they mean that the cars cannot be produced cheaply.These days, you cannot cut corners either. Extensive crash testing, worldwide approvals, minimum safety equipment and the sort of minimum spec that customers require these days mean that cars are expensive things.
you have to sell a lot of elises to generate the profit margin one £120k Evora GTE makes.
I see no reason at all why Lotus can't move up market. It's simply a matter of the car being good enough.
Pagani started from scratch with no heritage whatsoever and appeared to make a decent job of it, simply because the product is good.
Ford's GT appears to have been a big success both as a car and in terms of sales. Ford does have heritage on its side but in terms of the 'prestige' of the badge, considerably less than Lotus.
Besides as has already been pointed out the plan is to continue with the more accessible Elise and Exige plus have a crack at the high end of the market too.
I see no reason at all why Lotus can't move up market. It's simply a matter of the car being good enough.
Pagani started from scratch with no heritage whatsoever and appeared to make a decent job of it, simply because the product is good.
Ford's GT appears to have been a big success both as a car and in terms of sales. Ford does have heritage on its side but in terms of the 'prestige' of the badge, considerably less than Lotus.
Besides as has already been pointed out the plan is to continue with the more accessible Elise and Exige plus have a crack at the high end of the market too.
Tuna said:
doggydave said:
..an affordable product will save Lotus. Look at all of the MX5s etc on the roads.
The problem with that is that Lotus cannot now, and will never be able to make a car for MX5 prices. Hand glued aluminium chassis? Completely manual production line in the UK? Fibreglass bodies? These are all choices made because they cannot afford the sort of production lines and equipment that Mazda and Toyota can throw around. Those choice keep down the 'big costs' of being a car manufacturer (Toyota have invested more on a single factory upgrade than Lotus' entire budget for the next year), but they mean that the cars cannot be produced cheaply.I refer you to my previous post - sales up 3%, revenue up 8% in 2010. A limited run of 25 Evora GTEs announced for the Asian market - at £130k - and they get orders for 125+ so decide to offer it globally. DB would not have done that if he didn't think they would sell. I admit its going to get tougher but these sort of headlines don't say to me that they can't compete in the £100k plus market. With the GTE they already are.
Besides, as Rolls Royce, Bentley, Aston Martin et al are showing, that section of the market is largely recession proof. If the product is right (yes Lotus still have to prove themselves on the quality front) then they will sell.
Besides, as Rolls Royce, Bentley, Aston Martin et al are showing, that section of the market is largely recession proof. If the product is right (yes Lotus still have to prove themselves on the quality front) then they will sell.
Hedgerley said:
I refer you to my previous post - sales up 3%, revenue up 8% in 2010. A limited run of 25 Evora GTEs announced for the Asian market - at £130k - and they get orders for 125+ so decide to offer it globally. DB would not have done that if he didn't think they would sell. I admit its going to get tougher but these sort of headlines don't say to me that they can't compete in the £100k plus market. With the GTE they already are.
Ok so they sell, I dunno, 250ish special edition Evoras. There will always be enthusiasts with enough money to buy these cars but not enough to matter. I know there will be good profit in these cars but how long will that keep the factory and wages going. You can probably count it in hours. They can only make so many special editions before everyone get cynical about them, as they have about the Elise/Exige. They need sales in the 1000s to be profitable.You are right about the rich mans market. The recession doesn't apply. The competition in this market is way above Lotus at the moment.
I think we'll have to agree to disagree here. The GTE has probably already matched the profit they'd make from selling a few thousand Elises. The platform is good, and with the right power plant, it's a remarkable drive.
Wait until the new Esprit is launched before you decide how well Lotus can compete with the best of the best. The Evora is keeping them in the game, but the Esprit is the top of the bill and will demonstrate what they're capable of.
Wait until the new Esprit is launched before you decide how well Lotus can compete with the best of the best. The Evora is keeping them in the game, but the Esprit is the top of the bill and will demonstrate what they're capable of.
You all touch on some valid points, stuff I never thought about. Ultimately they need to find customers. They have two types of customer to keep happy:
1. Rich dude who will buy £100,000k car (with nice profit margins) and who will buy one every 1-3 years even in a recession.
2. The current Lotus customer – the enthusiast. The enthusiast is tight (massive generalisation I know) and will spend less and keep his car for longer.
So as Lotus are currently not in the position to sell £100,000 cars they have to keep their bread and butter happy – the enthusiast, the only people buying in to the brand. From a business point of view Lotus would rather sell to an overweight banker in the Far East than to a British enthusiast.
So the challenge for Lotus over the next 18 months (to when new models start arriving) is to keep selling cars to the above mention two target customers:
- Entice rich dudes to buy ‘enthusiast cars’.
- Keep the enthusiasts happy and entice them to spend more.
They just need to make sure they don't end up in 'no mans land' - which is kind of where they are now with their cars.
1. Rich dude who will buy £100,000k car (with nice profit margins) and who will buy one every 1-3 years even in a recession.
2. The current Lotus customer – the enthusiast. The enthusiast is tight (massive generalisation I know) and will spend less and keep his car for longer.
So as Lotus are currently not in the position to sell £100,000 cars they have to keep their bread and butter happy – the enthusiast, the only people buying in to the brand. From a business point of view Lotus would rather sell to an overweight banker in the Far East than to a British enthusiast.
So the challenge for Lotus over the next 18 months (to when new models start arriving) is to keep selling cars to the above mention two target customers:
- Entice rich dudes to buy ‘enthusiast cars’.
- Keep the enthusiasts happy and entice them to spend more.
They just need to make sure they don't end up in 'no mans land' - which is kind of where they are now with their cars.
One thing people keep doing, they're not separating the cars, i think people hear 100k+ for a car, and have Evora etc in their heads because of things like the GTE, we're talking this price as generalisation for a completely different kind of vehicle like the Eterne and Elite. Which incidentally, when given the choice of the pig ugly Panamera, i would have the Lotus Eterne all day long, a simply stunning 4 door GT. I like the new range, i was gutted they shelved the Elan for the time being, i would happily have one of them and change for a used Esprit further down the line.
If you were ask me if Lotus will be around around after 2015, most definitely YES!!!
If you were ask me if Lotus will be around around after 2015, most definitely YES!!!
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