Future of Lotus

[Akajak]

Genuine question; are all hypercars like Evija loss leaders to showcase the company ?

[electro_boy]

This is pure speculation on my behalf ... But I'd say no not all of them are loss leaders.  I'd think as a general rule of thumb a lot of hyper cars designed by well established brands as a halo car are usually loss leaders.  The Bugatti Veyron was sold at a loss, the VW group wanted it to be a showcase of their engineering skills.  I don't know if the later models created profit or not. The Lexus LFA was sold at a loss, again was supposed to be an example of their engineering skills. 

But these days we are seeing more and more hyper cars and manufacturers being announced.  I think a lot of these companies are funded by venture capitalist firms whose sole aim in life is to make more profit.  So think these cars will have to make a profit or if its a part of a longer strategy of establishing the brand first and releasing a updated new model afterwards, then they may make a slight loss but they'll have to keep the losses low to ensure they have enough left in the bank to complete the next model that will generate the profit.

[tim_marra]

@Akajak I think Mr Koenigsegg would find himself in a spot of bother if that were always the case

[Akajak]

do you think Evija is a loss leader ?

[PAR]

No. All depending on how many they sell those. Such products have been very profitable for McLaren and Aston Martin.

[C8RKH]

10 minutes ago, PAR said:

No. All depending on how many they sell those. Such products have been very profitable for McLaren and Aston Martin.

This in spades. I believe for many of the recent "halo" cars the margin was in excess of 50%!  As a result I suspect they recovered the development costs fully.

[C8RKH]

I know this is from the Evija, but I truly do hope Lotus are brave enough to eschew the "I need a 12inch IPad in my dash brigade" and develop the new cars interiors along these lines were to me, less, is most definitely more, for a sports car.

[Akajak]

any sun visors ?

[C8RKH]

Yes, but no mirrors on the back (if you look at the picture you can just see the visors)

[Geoffers]

1 hour ago, Akajak said:

any sun visors ?

Hope they are more useful than the ones in the Evora!

[Nelly]

9 hours ago, The Pits said:

Regardless, expensively engineered thoroughly developed and optimised versions of what we already have is a compelling thought. It was a chance squandered by Dany Bahar. Sadly I fear the crowd we have now have very different priorities and little appreciation of the current cars. I don’t think we’ll see lower, longitudinal mounted more engines for instance, I still dream about an Elise with the GT86 flat four but I don’t think they would see the business case for it or believe anyone really cares where engines go, as the 911 continues to prove. But by happy accident we might just get a last update on the current cars with more modern Volvo sourced interior switchgear. I did wonder if the Elise announcement last week was going to feature some new interior parts at the very least but it wasn’t to be. Another missed opportunity to move things on but new crowd just will not invest time or money in the current cars.

Complete agree Jonny @The Pits with both your most recent posts, but the above is the one reason I was underwhelmed with the Elise announcement.  I very much believe there is a market for the Elise, its more relevant today than it was when launched so wouldn't have cost too much to bring up to date, surely?  Your imaginary Elise above would have been epic.

[The Pits]

Apologies if already posted before but spotted this. Notably wider track than Evora. 

https://www.motor1.com/news/413199/lotus-announces-final-combustion-vehicle/?fbclid=IwAR3x1GDepWvRKyYR7ej-i60jBiDlCnPeHwL7kv1ogf5t-eXGLEDWKIKGv3c

[C8RKH]

Volvo developed a 4.4ltr V8 in conjunction with Yamaha - the B8444S. It is used in a number of cars, including the Noble M600 where it is longitudinally mounted, develops around 650 PS (478 kW; 641 hp) and oh boy, if there was just the slightest possibility I'd be in the boys room for a while!!!

Yeah, an electric version would be faster but I would not give a flying f..k! The last Esprit was a V8, the last Evora as a V8....  I know, I know, I shouldn't have opened that second bottle of wine so early......  Leave me alone. I've obviously got lock down fever.

Edited May 13, 2020 by Bibs

[The Pits]

Exciting idea but would probably end up with a huge price tag and there’s something about uncontrollable savagery that doesn’t quite sit right when it comes to a Lotus. Isn’t being over-chassis’d part of the Lotus way of doing things? I guess Evija is about to change all of that. The speculated 500bhp sounds instinctively  like it would make a better balanced package than 640bhp V8. But very happy to be proved wrong on that!

[electro_boy]

I think they do better maybe 2 better...  they should ask Toyota if they have the V10 they used for the Lexus LFA! I think was developed by Yamaha too?

[yeller77]

Quote

 

Lotus has an entry-level model under development for a debut in late 2020 or early 2021, and company CEO Phil Popham says it's the company's last combustion-powered model, according to an interview with Automotive News Europe. The automaker projects prices to from £55,000 to £100,000 ($61,600 to $123,000) at current exchange rates.

"Our focus now is on sports cars, but we do think the brand has the potential to move into other segments. And Geely has expertise in areas such as electrification and autonomous driving," Popham told Automotive News Europe.

 

As I'm unlikely to be in the market when these models are slated to come out, I think I'll not be holding out hopes of buying a new Lotus ever again on this note. 😢

"electrification and autonomous driving" ≠  "For the Drivers"

[C8RKH]

Oh boy. I lovin' this ICE love in!  Hahaha, where are the electric jockeys now? Your day is tomorrow, leave us to enjoy our day today!   

Peace brothers. And sisters. And those still undecided.

By the way, Aldi done a fine Barbaresco ( Roversi, Piedmont, 2015). The second bottle going down better than the first. If this carries on I'll be sat on the patio shortly, with a crackin' half Churchill, going vroom, vroom, blubber, blubber.  Got another bottle slightly chillin' away just in case....

[100th_Idiot]

8 hours ago, electro_boy said:

This is pure speculation on my behalf ... But I'd say no not all of them are loss leaders.  I'd think as a general rule of thumb a lot of hyper cars designed by well established brands as a halo car are usually loss leaders.  The Bugatti Veyron was sold at a loss, the VW group wanted it to be a showcase of their engineering skills.  I don't know if the later models created profit or not. The Lexus LFA was sold at a loss, again was supposed to be an example of their engineering skills. 

But these days we are seeing more and more hyper cars and manufacturers being announced.  I think a lot of these companies are funded by venture capitalist firms whose sole aim in life is to make more profit.  So think these cars will have to make a profit or if its a part of a longer strategy of establishing the brand first and releasing a updated new model afterwards, then they may make a slight loss but they'll have to keep the losses low to ensure they have enough left in the bank to complete the next model that will generate the profit.

Don't really agree. VCs don't generally make their money by taking small companies to successful big ones. That is a long slow process and they want to profit and turnover their cash.  They will be looking for an M&A exit to sell the company so loss making halo is exactly right.

[C8RKH]

Yup - spot on. VC's are smash and grab merchants and fook any long term collateral damage. "Show me the money"....

Edited May 13, 2020 by Bibs

[100th_Idiot]

Wouldn''t say smash and grab. I have worked in a startup that was VC funded with an OK exit, There's a place in business for VC funding but they don't want their cash tied up for 10 to 20 years. That is not their business. They take a risk on early funding and only make a profit on 1 in 10 of the investments.

Edited May 13, 2020 by Bibs

[C8RKH]

Fair point, I was being glib.

I've worked more with longer term investors, who work differently as they have, doh, a longer term outlook

 

[electro_boy]

@100th_Idiot thanks for the insight.  Also I'm guessing "M&A exit" means merger and acquisition exit?

So the idea of a VC firm backed project is to come in at an early stage when the business is worth less.  Spend money on creating hype and interest, spend money on developing novel new technology and ideally get the interest of a bigger car firm who want that tech for themselves so buy you out?

Thats got to be a stressful job being in charge of that and deciding which new "best thing since sliced bread" is going to actually make it or at convince people enough to give you money, especially if its only successful 1 in 10.

[au-yt]

 Left field observation from Porsche history, but I’m some way I see a parallel here, the 964 was a production cost nightmare, Porsche brought in a team of production experts from Japan and the 993 started to turn a profit. Then the aircooled car couldn’t meet pollution or the noise Reg,s enter the 996..Bigger car then bigger then bigger. The 993 was the panicle of the air cooled cars but the 964 is more pure old school Porsche. The Evora to me is the 964 of the Lotus world, history will tell.

[100th_Idiot]

On 14/05/2020 at 12:56, electro_boy said:

@100th_Idiot thanks for the insight.  Also I'm guessing "M&A exit" means merger and acquisition exit?

So the idea of a VC firm backed project is to come in at an early stage when the business is worth less.  Spend money on creating hype and interest, spend money on developing novel new technology and ideally get the interest of a bigger car firm who want that tech for themselves so buy you out?

Thats got to be a stressful job being in charge of that and deciding which new "best thing since sliced bread" is going to actually make it or at convince people enough to give you money, especially if its only successful 1 in 10.

More or less. Sometimes it's not even early stage but non existent. They fund people with a concept.

[KAS-118]

Another interview with Phil Popham.

Its mainly about the Evija - but does state:

"So an SUV may not be immediately on the cards but the company is continuing to develop a new sports car that will be a more affordable option for Lotus enthusiasts....

...The Evija is our halo car, stretching the boundaries of automotive design and technology, but our strategy all along was to produce something that is more widely accessible."

https://www.dailyrecord.co.uk/lifestyle/motoring/evija-hypercar-marks-new-beginning-22064504