Lotus future in the UK

[mdavies]

Really heartwarming to read about Britain's international relationships with no mention of the EU at all! It can be done - go to it!

[Bibs]

Top Gear Magazine interview with Bahar

[NedaSay]

DB:

There are lots of improvements since we started this journey back in 2009 – let me list the most important ones:

· The management team has improved overall operational excellence and introduced greater governance.

· Since the journey began, turnover has consistently increased (£110m/FY09, £139m/FY10, £150m/FY11).

· A reduction in assembly labour hours by as much as 16%.

· We established Lotus Product Council to ensure improved governance around product development.

· We moved to multi-line approach to improve production optimisation and flow.

· The dealer network is undergoing rationalisation, with new markets developed and less effective sites closed.

· Modernisation and improvements of the Lotus site.

· Third-party engineering division restructured and strengthened.

Edited May 23, 2012 by NedaSay

[Bee]

I had all kinds of thoughts about the interview but then I watched the film with the Evora GTE and now I feel like I'm ten, again, and have just seen my first Esprit! That's one properly desirable piece of kit! I only wish that the standard Evora had been the 'S' and the Evora S had been something like this! Regardless, it's hard not to look at that car and envisage Lotus forging a real future for themselves.

Edited May 23, 2012 by Bee

[Bee]

What a change two days can bring! With Bahar gone, will the team he put together stay once the Esprit is released? Will Donato Coco and Wolf Zimmermann want to stay at a company lacking a driving force and sense of purpose? Perhaps I'm being somewhat harsh, but if Lotus is now to be led by a 'team' of executives whose priority is likely to be cutting costs and establishing increasingly conservative ambitions then I fear that their future products may increasingly reflect such a philosophy.

That dream I have of getting into the new Lotus Elite suddenly seems a whole lot less likely. I sincerely hope I'm wrong, I really do, but this does not seem good.

[Stirling_Villeneuve]

I don't think you're being harsh, sadly I think you're being realistic. What's the options aside from the accountants and lawyers taking over and seeing what they can salvage? I was only saying earlier this evening how excited I was about my Exige S test drive, now I'm wondering realistically how much of a deposit would I be willing to gamble. This is the worst news for Lotus in a long while, aside from perhaps Swizzy being announced as MD... I suppose at least that's looking unlikely!

[jonwat]

Proton: 'Lotus will not be sold' reports Autocar

[hedgerley]

Amidst all the hoo-haa of DB's suspension, all the reports missed a short throw away line that was reported in the Malaysian press last week, following the DRB-Hicom Board meeting on Thursday -

http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=33778:proton-suspends-lotus-chief&Itemid=3

The key line is -the board also accepted the resignation of its group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir and decided not to sell its stake in Lotus.

I did post this last Friday but until that Autocar piece none of the other sources seems to have picked it up.

[Bazza 907]

I think that too much emphasis is read into what is reported in the press. Journalists very rarely have the 'inside track'.

I speak to journalists pretty much every day. They are there is fill column inches and sell a story. In many instances they simply make things up and pass it off as fact. No news doesn't sell and doesn't impress editors.

Let's be careful not to jump to any firm conclusions based simply on what is written in a paper or magazine.

[hedgerley]

Just for once Barrie, this one is based on fact. Herewith Proton's full statement -

LOTUS NOT FOR SALE

PROTON today reiterated that its holding company DRB-HICOM Berhad (DRB-HICOM) is not selling Lotus, a wholly-owned subsidiary of PROTON, despite recent media reports based purely on speculation and rumours.

Executive Chairman of PROTON Dato' Sri Haji Mohd Khamil Jamil said: "We acknowledge that Lotus can provide value to PROTON.

" Lotus is an iconic brand with global presence and positioning, coupled with unsurpassed engineering expertise and a talented workforce."

Earlier this month, Dato' Sri Haji Mohd Khamil visited Lotus facilities at Hethel in Norfolk. In conjunction with the visit, Dato' Sri Haji Mohd Khamil also had constructive meetings with South Norfolk MP Mr. Richard Bacon and British Business Secretary, Dr Vince Cable.

Commenting on the meetings, Dato' Sri Haji Mohd Khamil said: "They were both very supportive of our views and developments with regard to the future plans for Lotus.

"Subsequent to the meetings, the British Government has agreed to consider reactivating the £10 million Regional Growth Fund pledge to support Lotus's vehicle development plans in Norfolk."

Edited May 29, 2012 by hedgerley

[Bazza 907]

Mark

I hope that this is true and but I still think you need to be careful in stating what is and isn't a fact. For example the press release you reproduced...

1/ It was issued by a subsidiary (Proton) and not by the parent who actually own/decide the future of Lotus.

2/ It may have been correct at the time the press release was published but things change - There was no timescale put on ownership. Some press releases say these sorts of things then the next day another is issued reversing the previous one.

3/ Whoever owns DRB-HICOM may have their own views and it is dangerous to assume that they agreed the Proton press release prior to its release.

See what I mean..?

[gtornes78]

Barrie,

1: Dato' Sri Haji Mohd Khamil Jamil is MD of the DRB-Hicom group, and from what I understand the statement is issued by DRB-Hicom's PR agency.

2: True, but this was issued yesterday, and while true that DRB-Hicom have not ruled a sale of Lotus at some point of time, they have now repeatedly stated that they are not actively pursuing this, so at least for the time being a sale seems to be off the cards.

3: See #1 above. Considering that Dato' Sri Haji Mohd Khamil Jamil is appointed exceutive chairman of Proton directly by the DRB-Hicom chairman, Datuk Syed Mohamad Syed Murtaza, the statement seems pretty likely to be well anchored with the powers at DRB-Hicom.

[Bazza 907]

Geir

Do you know the investment philosophy and timeframe of Etika Strategi?

[simonb]

the thing that worries me with the denial, is it seems to be moer about Proton wanting ten million of your finest English pounds than it is wanting to develop Lotus

[hedgerley]

Barrie, the fact I was referring to was the statement by the protagonists themselves, as opposed to the speculation/conjecture/spin by the press which you rightly referred in your previous post. I doubt Proton would have been permitted to release the statement of their own volition without the blessing of their parent company. And as I've previously mentioned, the decision not to sell Lotus was taken at a DRB-Hicom Board meeting last Friday - given they are a quoted company such announcements are not made lightly.

I fully accept that things might change, but the Proton release came out last night and has now been reported widely and its all we have at the moment. I may be clutching at straws but i would hope this brings a period of stability for the guys at Hethel and whether DB returns or not, they get a chance to deliver on the recovery plan, even if it is seriously amended..........

[Gus82]

If it allows them time to launch the refreshed models teased for Goodwood and launch the Esprit then its good news. I doubt they would sell before this as they would probably have to sell for much, much less money I would have thought.

One more thing. I would file this under "very unlikely" but someone on the Carmagazine comments section has claimed to know of high level discussions to sell to Tata/JLR. I would love it to be true but I doubt it somehow as Jaguar in particular still needs a lot of investment, a long with the non Range Rover Land Rover models. However I suppose Lotus Engineering could help with green technology and Ratan Tata is a petrol head. Still unlikely though.

[Gasman GT3]

Perhaps DRB-Hicom should sell Lotus to Tata, it doesn't seem to have done Jaguar Land Rover any harm. Billions invested and cars they cant build quick enough, and Tata had the foresight to leave well alone when it came to where to design and build the cars

[hedgerley]

I posted a few weeks back that a Tata/JLR acquisition, perhaps with Genii involved (Lopez is car nut and knows about finance) might be a good thing. Given the results announced today, profits up over 30% to £1.5b and record sales all over the place, Tata might not be a bad option. Considering that 4 years ago they were on their uppers, about to close factories and having to go to the Government cap in hand (which they didn't need in the end) the turn-around has been astonishing.

[Iconic Ride]

Mark, do you have a breakdown of which of Tata's lines generated such laudatory profits? Were Jaguar and Land Rover in that category? Which is to say, did they "turn around" the "acquired lines" in the same manner as their existing products?

Cheers,

John

[gtornes78]

Barrie,

No, but would be interesting to know more. From what I understand Etika Strategi is controlled by Syed Mokhtar Al-Bukhary, so I guess ultimate descissions rest with him, but I'm unsure about how much detailed interest he would have of a subsidiary (Lotus) of a subsiduary (Proton) of a company (DRB-Hicom) where he controlls about 53% of the shares thourgh an investment company.

Edited May 30, 2012 by gtornes78

[hedgerley]

Mark, do you have a breakdown of which of Tata's lines generated such laudatory profits? Were Jaguar and Land Rover in that category? Which is to say, did they "turn around" the "acquired lines" in the same manner as their existing products?

Cheers,

John

I think the numbers here speak for themselves John -

http://www.bbc.co.uk/news/business-18250315

As the sidebar says, there was speculation that JLR might not even survive. Even after Tata acquired JLR from Ford four years ago, there was real concern that significant cuts would have to be made, with thousands of job losses and factory closures. The Government was approached for a bail out (remember the GM debacle at the same time and they went into Chapter 11 - most car manufacturers were staring into the abyss)

Whilst it has cost Tata billions, they have turned JLR into one of, if not the most successful outfits today. And customers seem to like them as well -

http://www.bbc.co.uk/news/business-18235700

They could probably pick Lotus up for no more than a quarters profit plus another quarters profit investment for the new model strategy.

[TBD]

I'm sure the line of prospective buyers for Lotus is very long. It would be a good time to buy cheap. Lotus is in the midst of a major realignment, has already spent over a hundred million, but at this stage that is all mostly intelectual asset, the finished products are not yet there. These intelectual assets don't generally make it well into a purchase price, they're not tangible. Probably selling Lotus now wouldn't evven cover the loans Proton has guaranteed for the turnaround.

And that is exactly DRB's problem. I'm quite convinced they would like to sell, but must have realized soon that now is not the right time. I quite expect them to get the Esprit on the road as fast as possible and undertake some strong efforts to dress the bride - with or without DB.

[Iconic Ride]

Much appreciate the links, Mark. I'm especially intrigued by the sidebar's observation that...

"In the years ahead, JLR will speed up its new model roll-out as part of a broader effort to cultivate an image of a technology-inspired carmaker with heritage to boot."

Fairly begs for the substitution of LMC for JLR!

[Bee]

http://www.edp24.co.uk/business/hethel_based_lotus_lays_off_contractors_1_1419536

Looks like I can kiss that dream of owning the new Elite goodbye!

[Gus82]

Given that so many contracts are to be scrapped, I wonder if the in-house V8 will be bumped off? I was surprised by Wolf Zimmermann's quote (in last months Topgear Magazine) that the V8 development "hasn't really started yet, we are only just seeing if the engine is reliable". Given that there was rumors that much of the engine development was by an outside contractor who was basing the unit on an existing project and much of the cost could be involved in productionising it (both finishing making it reliable when produced in numbers and also setting up production facilities).

I also wonder what other tech on the Esprit are actually developed? The car could change substantially from what has been recently planned.

Edited June 23, 2012 by Gus82