Lotus Makes A Profit!

[hedgerley]

Excellent news, even if it was down to cost cutting rather than increased sales (and Proton waiving repayment of loans, again. They've got to be the most benign owner Lotus have ever had). Well done MJK and thanks Proton. Lets hope he/they can steer the company through these troubled times and keep the 5 year plan on track.

From tonights London Evening Standard -

http://www.thisislondon.co.uk/standard-bus...A32m/article.do

[Mark Blanchard]

And well done to MJK for turning the Company around! Long may it continue.

[USAndretti42]

Mixed news. Turnover down and sales down and people laid off but, on the other hand, the company has shown good business practice and cut costs to more than match the drop in turnover and black ink always looks better on the books than red.

Kudos to Proton on waiving the loan repayment again.

[Tentenths]

And there's more...

This from the Eastern Daily Press

Lotus car sales defy the credit crunch

19 September 2008 06:07

Norfolk sports car manufacturer Lotus is bucking the national trend by recording a huge increase in new car sales last month, compared to the same period a year ago.

While the UK new car market is in the doldrums, recording the lowest August new car registrations since 1966 as the credit crunch deepens, Lotus has seen its sales soar by a mega 292.31pc.

The company sold 51 cars in August 2008 compared with 13 in August 2007, in what is traditionally one of the quietest times of the year, according to figures released yesterday by the Society of Motor Manufacturers and Traders.

The society said Lotus had recorded "exceptional growth" in the month, only exceeded by car manufacturer Smart which sold 260 vehicles compared with 32 during August 2007 - an increase of more than 712pc.

By contrast, the majority of companies, including Vauxhall, Ford, Porsche, Mercedes-Benz, Land Rover, Alfa Romeo and Aston Martin, experienced a significant drop in sales.

Mike Kimberley, chief executive of Group Lotus, said: "The reality is that we are doing well in a down market. Year on year we are actually up 10.6pc. It shows this is not just a flash in the pan and compares to Porsche who are down 26pc, and Bentley down 18pc.

"Our customers really are afficianados and enthusiasts; people who really know what cars are about; and also they know the exact specifications and what the comparisons are in the market and the residual values - which in our case are extremely high."

He said the company produced light, safe, high-performance cars which were more economical to run and less expensive than some of their competitors. And the launch of the new Evora in July had played a part in the equation by raising the profile of Lotus across the globe.

"We have got 250 deposits in the UK alone and we haven't announced the price yet," he added.

As to coming months, Mr Kimberley said: "The market is softening, there's no doubt about it. I am sure we will hold our own better than the bigger cars, the heavy cars and the gas guzzlers. Yes, we are bucking the trend, not only in the UK but in Europe even more. Our sales in Europe are massively higher than we bargained for. The only area running at a low level is America."

Meanwhile, Paul Everitt, SMMT chief executive, urged the government to take action to kick-start consumer confidence after new car sales slumped to 63,225 last month, down 18.6pc on the previous August.

"The slowdown in the UK mirrors the difficult conditions being experienced across the main European markets," he said.

"Industry is encouraged by the growing interest in lower carbon cars, but it is concerned by the reluctance of consumers to commit to major purchases. There is a clear need for sustained action by the government to boost the economy and restore confidence."

August typically accounts for about 3pc of annual volumes, falling just before the plate change in September.

Onwards and upwards

[Rodewaryer]

Not sure what all here think of the Top Gear write up on the Evora but I thought it was pretty optimistic. Maybe I'm just easy to impress......

[Kimbers]

Glad James posted that, thanks mate.

Yes Lotus are in profit for the first time in 6 years but it's not just down to lay offs and downsizing as they are currently taking on another 250 staff. Engineering sales have increased massively (I think MJK told me 400%...but it may be more), according to the most recent IMI magazine they are one of the only car makers to increase sales year on year 2007/2208, whilst Porsche are down 27% ( so they aren't selling or making less.

The Evora will see a strengthening of their position and long may it last.

[percyporsche]

51 cars how many were the europas it's a disgrace,it's a bit like saying a solvent bank just has liquidity problums all most bust more like

[USAndretti42]

I'm not sure you can be solvent and have liquidity problems at the same time.

How do you work out they are almost bust? I think that however you read it, they are in a better state now than they were this time last year.

I am confused how one article refers to lay-offs and drops in sales and the other refers to sales going up and Kimbers tells of expanding staff?

[Kimbers]

That comment Paul shows how little you know of the UK car market. Historically August is a poor month whilst buyers await the new registration in September. 90% of sales in August are Corporate registrations, as private clients await the Sept 1 deadline. The fact that Lotus were up in August 6% against virtually every other manufacturers drop is simply astounding in todays market. Here's some direct Quotes from Autocar magazine 5th September:

As a whole, the UK's new car market was 18.6 per cent down year on year - but Britain's own brands were hardest hit.

Aston Martin sold just 19 cars last month, compared with 58 cars in August 2007. (sort of kicks your theory into touch)

Other luxury car firms like Porsche and Lexus have also seen year-on-year sales in this country fall by more than 50 per cent.

But today it was revealed that Bentley's Crewe factory has cut back to a three-day week, and JLR's Solihull plant has called Friday a "non-production day" to avoid stockpiling new cars.

Jaguar, which has been resurgent since Tata bought the company, sold only 273 cars, a 40 per cent drop year-on-year. And Land Rover posted just 422 sales, a massive 58 per cent fall compared with last year.

I think 51 sales in August is superb for a small specialist maker from Norfolk, up 6%, seeing as how Jaguar can only sell 5 times that number with the huge number of models and capital outlay they have.

Oh and FYI Ferrari, Lambo and all the other presige brands didn't even make it on to the sales figures....you have to sell more than 5 cars in a month to do so.

**Please note these are actual quotes from Autocar and does not reflect any quotes or thoughts of anyone at Lotus**

[Tentenths]

51 cars how many were the europas it's a disgrace,it's a bit like saying a solvent bank just has liquidity problums all most bust more like

51 cars sold in August 2008 v 13 cars August 2007 v comparable figures from other sportscar manufacturers... hardly a disgrace!

Not sure of the relevance of the number of Europas within the figure either? 51 Lotus is 51 Lotus, non?

Surely, we should be congratulating MJK and his team on such a dramatic turnaround, especially in such difficult economic circumstances, not castigating them.

I am confused how one article refers to lay-offs and drops in sales and the other refers to sales going up and Kimbers tells of expanding staff?

The first article makes reference to Lotus' accounts, presumably their latest year end audited figures. As such the data contained therein will have been based on a 12 month period ending earlier in the year. Assuming the accounts have just been approved and released the reporting period probably ended Q1, or very early Q2.

The EDP article, on the other hand, is based on the latest position/figures. So while the accounts refer to staff being laid off, that could well have happened some 12 - 18 months ago. Since which time the balance sheet has been rebuilt thus enabling the company to begin hiring new staff again.

[DanR]

What a tough business. GBP2m profit on costs of GBP106.5 (where's the pound symbol on this 'puter). Basic bank interest rates are higher.

[USAndretti42]

Other good news for Lotus is that the US dollar has strengthened against the pound so they can make more money on each Elise and Exige they sell over here. Very important for a company that exports a lot of its product to the States. Also makes their quotes for engineering work for US companies more competitive. A drop of about 10%, for about $2.00 to $1.77 to the pound, is huge for them (and Jaguar, Land Rover, Aston Martin and Bentley).

If it stays that way, it will also allow them to price the Evora more competitively.

[Gasman GT3]

I wonder if the rise in Lotus sales last month has anything to do with the fantastic show they put on at the London Motor Show. The makes with poor uk sales did not display, Jag, Aston, Ferrari, Lambo, Porsche. Just goes to show it pays to advertise.

[hedgerley]

I'll say it again, 21 of the 51 were in Scotland out of Murray Motors in Edinburgh. In the current climate, HBOS especially, this is outstanding. I think the buzz of the Motor Show, the Evora launch and probably the 60th Anniversary Party all contributed. Well done to Graeme and the team.

So, the weather today is stunning, hardly a cloud in the sky, the back roads are fantastic and there are no speed cameras in Fife. So I'm off out for a blast. See ya!

[Kimbers]

The first article makes reference to Lotus' accounts, presumably their latest year end audited figures. As such the data contained therein will have been based on a 12 month period ending earlier in the year. Assuming the accounts have just been approved and released the reporting period probably ended Q1, or very early Q2.

The accounts were up to Dec 2007 I believe.

[Bibs]

Well done Lotus, nice to see them bucking the trend.

[hedgerley]

The September figures are just out. Lotus sold 88 last month vs 109 for September 07. Year to date figures are interesting though - Lotus is one of a handful posting an increase in sales, up 4.61%. Aston Martin is down 24.53%, Porsche down 27.4%. A sign of the times is Smart sales UP 78%.

Reports and full sales figures here - http://www.smmt.co.uk/articles/article.cfm?articleid=18080

[Kimbers]

Unfortunately the credit crunch has really started to bite. This shows in the September figures more than the August figures because thats when the world started to fall apart.

Interesting quote today from a friend of mine who sells SEAT's. "I sold 8 cars last month and could only fund half of them, the rest I had to turn away!".....Wow how times have changed.

[gtookey@hotmail.com_]

To return a profit of just under 2% of investment is not very high it has to be said, but when you consider the global markets and economies that Lotus operates in I think it's BLOODY FANTASTIC. Especially when most companies are in the red or just flat lining A profit is a profit and that is what counts. It's even more impressive when you consider that's a 6.9m swing from negative to positive in a 12month period.

WELL DONE MANAGEMENT & STAFF.

Edited October 6, 2008 by gtookey