Future of Lotus

[Bibs]

One of Lotus's USP's is that they're handbuilt in Britain. Other than the SUV, I can't see manufacturing being based elsewhere unless sales outstrip the facilities at Hethel, which isn't unlikely for some time. 

[NedaSay]

I think the JMG's plan will be executed: sports cars will remain in Hethel anything else ( SUV, Sedan) is to be built off shore. 

 

[NedaSay]

Just watched the press conference of DRB-Hicom and Zhejiang Geely Holding on Proton. Bear with me this is a bit of a long one.

A few good things first that the Geely's partial acquisition of Proton is unlikely to cause a dent  in Geely's finance, the rough cost is a meager GBP 31M or not even USD 40M in cash! That's not even the cost of a headlight redesign for Volvo, the rest is supplying the Boyue SUV platform to Proton. So in other words they provide a car that they want to sell in a maximum of market to Proton... The car is already a best seller in China (100,000 cars sold in 2016 alone), shares underpinnings with the upcoming XC40 so the development of that platform is about to pay for itself pretty quickly. Proton will be responsible for making it RHD, so Practically Geely just paid USD 40M for something that would have cost about the same in China (because of homologation's costs) and then they would have had to export it to the ASEAN. They just made that a lot simpler and cheaper for themselves.  

Second, Geely will make Proton its local brand, Geely cars won't be sold in the ASEAN under the Geely brand, Proton gets to rebrand Geelies for the South East Asian market. The Boyue SUV will be first, and will be followed by other models, the Emgrand  is probably the next in the pipeline as the ASEAN still loves sedan type cars and the subcompact Vision model would be a logical pick too. The Geely brand is not set to expand beyond its current markets for now, Geely exports cars to a handfull of market in the middle east and Africa.

Proton is set to become Geely's Skoda, they will get all the platform they can modify them to suit their needs which may include modifying the car a lot, the example of the VW Polo and the Skoda Fabia was used. Geely will not compete with Proton in the ASEAN but both brands may compete elsewhere in the future.

Proton is going to be "stuck" in the ASEAN for the foreseeable future, Geely will not make Proton Global before it recovers on its home market and makes headway in its regional market. That will bring the Malaysian dreamers back to the ground. The Malaysian media had been all about how Geely could make Proton a global brand in no time, well it may take a while as Geely wants Proton to recover a significant marketshare at home first. They did not say what was a significant market share and they did not say when it was going to happen but it will have to happen before Proton can go beyond its current sandbox. Li then said the end goal is to be number one in Malaysia and top 3 in the ASEAN, this is quite lofty. 

Now it is interesting to know that the deal was effectively very cheap for Geely, so I wonder how much Peugeot of Suzuki were offering. I think that Peugeot was probably offering a symbolic euro and the perspective of the brand to disappear ; the Proton brand is arguably a weak one even on its home market, Proton and Peugeot do share the same totem animal, the lion feature on both logo, and Peugeot has long history of killing brands Talbot, Simca, Panhard...  Suzuki would have done about the same kind of deal but with less to offer beyond small car platform. 

The Malaysian government will still have to foot some bills, Proton expects to get another MYR 250M or almost USD 60M in soft loan form and DRB-Hicom will restructure the debt so that the partnership gets a clean slate to work from. 

So in effect Proton gets much improved platforms, a new management team and more money from the government while Geely just got a new turn key manufacturing plant with a 400k capacity and access to a 600M people regional market for $40M! That's not bad.

As for Lotus and that's what interest us the most, Lotus Advance technology (the Malaysian holding of Group Lotus PLC )has been sold and is not part of Proton Group any longer!  Li said that their goal was to bring forward new products launches and increase output capacity in order to increase the brand appeal. That I think pretty much means that Hethel is safe as Hethel is pretty much part of the brand. I do see a lot of cross pollination between Lotus, Volvo and Polestar in the future. As Lotus is quite small and nimble we may see the effects of the change of ownership very soon. Geely probably has a team of Swedish and Chinese managers and engineers roaming around Hethel already. I think the area is about to see a lot of blue V60s. The upcoming Elise is going to set a few things right. Now if they could start with the Evora cabrio getting the automated roof, the 8 speed auto (used by Volvo already) and a proper launch. Pretty please.   

[harrry]

I strongly believe all lotus cars should be made in Hethel.

Lotus is a world renowned brand with an exceptional heritage, and much of the appeal is to do with where they are built. The history, the test track, the local roads, the dedicated workforce, the engineering knowledge are all fundamental. The appeal of an SUV made in Hethel would be much greater than one built abroad, and that would apply to all global markets.

The economics also makes sense. Wages in China have gone up considerably in the last 10 years. My brother has a share of a glassware factory there and the difference in wages is nothing like what it used to be. The fall in the value of the pound makes an investment into Hethel much cheaper, not to mention the cars better value for export. Obviously automotive supply chains are very international, and Geely/Volvo parts would be essential, but UK parts manufacturing has grown rapidly and could be developed further. The fact is that car buyers in emerging markets are prepared to pay a premium for German, UK and Italian engineering. 

Lotus has never really been profitable, but that has been down to a lack of investment, and the fact there weren't so many people on the planet able to buy premium cars in the past.  A significant investment into Hethel, for both sports cars and SUVs, would pay huge dividends.

 

 

 

[NedaSay]

I think that with the looming SUV Hethel does not have the capability to cope with the upshift in production. JMG was targeting a car able to sell 15 to 20k per annum and the factory is reported to have a max capacity of 7000 per year, Bibs please correct me on that one if I am wrong. However production could be pushed upward if they were to finish building the extension skeleton that has been collecting rust the past 4 years. I still don't think this extra production hall would be enough to cope as the SUV production line is going to be heavily automatized. 

I think Geely will bring the Lotus SUV production in house, as in in one of their factory surely has the capacity, the SUV may even end up being made in Malaysia for the RHD market as Geely wants to make Proton's production their new RHD hub. Geely is all about optimizing and platform sharing with so the SUV will probably use has much of the XC underpinnings as it looks to me that Lotus' VVA and Volvo's SPA are not incompatible. the SUV will be more aluminium intensive therefore much lighter and more Lotusish.   

JMG said that after the SUV, he was interested in a sedan, well there again I'm pretty sure that S/V 90 platform can get a whole lot lighter and a new dress could make it a very suitable replacement for the Lotus Carlton. Even though personally I don't see the super saloon niche really going anywhere : Maserati's are tanking the Rapide has not set Aston sales on fire...

But what matters the most and I may be getting ahead a bit here, but Hethel production is safe, they will need it going forward if anything purely for marketing purpose, being the spiritual home of the company and all of that.

[C8RKH]

On 2017-5-28 at 11:31, Andyww said:

The Lotus acquisition makes perfect sense for Geely. What does not make sense is the acquisition of LTI or Carbodies or Manganese Bronze or whatever they were called at the time. That looks very much like an impulse buy into something quintisentially British rather than a prudent financial decision. 

Once the novelty value of having cute English black cabs running around in China wears off, it might not be something they want to continue with. 

Like @mawheele I also disagree with you Andy.  There was a huge deal for an 1,000 cabs just recently in Baku and more to follow. If anything they are taking what is a pretty good taxi design, with full accessibility options to newer and broader markets. They got it on the cheap too. Pretty shrewd really.

[mawheele]

10 hours ago, NedaSay said:

Now if they could start with the Evora cabrio getting the automated roof, the 8 speed auto (used by Volvo already) and a proper launch. Pretty please.   

Unlikely to use the 8-speed gearbox (is it a ZF unit? - I guess I should really know as I have one - I'll go and check). That'll come as they switch next gen products to 4-cylinder + electric motors 350bhp to 400bhp.  That must be 2-3 years off unfortunately.  Elise can take the 256Bhp 2.0 4-cylinder unit which is outstanding output for the volume. 

[NedaSay]

It is an Aisin unit, the same unit used by Toyota on the new Camry V6 and also the same unit used by Polestar on the S/V60 in which it copes with a whopping 470nm. If you think that the 256 bhp is outstanding what about the 365bhp twincharged unit you can find in the Polestar?

[C8RKH]

Am I the only one who's heart sinks when he reads talk of Lotus, SUV's and Sedans in the same sentence?  I know volume is everything these days, but...............................

A little piece of me will die when Lotus produces one of these. Such a shame that there is not space for Lotus to be the mass (say 30k vehicles pa) producer of the best small and medium sized, affordable (up to £100k) sports and supercars on the planet. The tech and lightness they develop could be licensed to others to makes SUV's (Shit Ugly Vehicles) and Sedans.

I do by the way think Geely is a pretty savvy and smart operator so I do have hopes for Lotus and her future.

[silverfrost]

I would love to see Lotus just build sport cars but they still need money and today's market you have to be creative to continue a revenue stream.  If that meant lotus built mopeds I would still be happy if it gives them the funds to continue to produce amazing new sports cars 

[NedaSay]

15 minutes ago, C8RKH said:

Am I the only one who's heart sinks when he reads talk of Lotus, SUV's and Sedans in the same sentence?  I know volume is everything these days, but...............................

A little piece of me will die when Lotus produces one of these. Such a shame that there is not space for Lotus to be the mass (say 30k vehicles pa) producer of the best small and medium sized, affordable (up to £100k) sports and supercars on the planet. The tech and lightness they develop could be licensed to others to makes SUV's (Shit Ugly Vehicles) and Sedans.

I wish they could do that but come to think of licensing tech doesn't work in the car industry. Carmakers only licence stuff whose technology is about to be outdated or they have something better coming soon. Companies prefer not to license because of the dent in due royalties and the technology transfer that will inevitably happen. You can sell the engineering which Lotus has done before but unless you own the IP and that IP is so cutting edge that it cannot be replicated and improved upon licensing doesn't work. And actually may come back to bite you in the arse, Lotus is quite familiar with shitty licensing deal, Geely may have to deal with some of it actually. 

[Andyww]

1 hour ago, C8RKH said:

Like @mawheele I also disagree with you Andy.  There was a huge deal for an 1,000 cabs just recently in Baku and more to follow. If anything they are taking what is a pretty good taxi design, with full accessibility options to newer and broader markets. They got it on the cheap too. Pretty shrewd really.

OK thats good. I am not sure why they are not using Vitos but good that they arent.

 

[Dan E]

On the SUV do you think this would be fibreglass? That, I think, would put people off. 

[C8RKH]

37 minutes ago, Andyww said:

OK thats good. I am not sure why they are not using Vitos but good that they arent.

 

Lol, I hate those Vito's!  When in London and waiting for a taxi I will let a Vito go and wait for a proper black cab. In the Vito you can't open the windows properly and you sit way too far back to have some craic with the cabbie.

I know I'm weird, but I just think the traditional black cab cannot be bettered....

[Dan E]

Oi I like my Vito. ?

[silverfrost]

Regarding the Suv cars if they will be fiberglass they pretty much will be in a certain manner so to speak, most decent mass produced cars are now aliminuim body shell with plastic boots,wings,bonnet and doors. 

This not only keeps build costs down but also makes the vehicles extremely lightweight helping out also on higher mpg and performance etc. 

But I would say plastic rather than grp especially with it now been in the Chinese connection 

[auRouge]

SUV will be a normalish car... mass production will need mass production materials with a hint of lightweight thrown in... it's a moneymaker not an eccentric fast family car. They need it to generate profits to allow the sports cars a future. 

Nobodies mentioned the elephant in the room!

BREXIT!!!!!!!!! just as our carmaking industry was gathering pace CEO's and controlling stakeholders at BMW (brother and sister have pledged Electric Mini to Netherlands or Germany to protect euro), Nissan and Toyota are all prepared to move business because of the tariff threat.. 

"No deal is better than a bad deal" ffs??‍♂️

 

[NedaSay]

7 hours ago, Dan E said:

On the SUV do you think this would be fibreglass? That, I think, would put people off. 

Lotus has been investing in its lightweight structure factory, they can do more than aluminium extrusion now or at least do more complex shapes, I think they have acquired a stamping ability, while Volvo and Geely can provide cast alloys, the SUV should be an all aluminium affair and will be built in China.

As for Brexit... Well hum how to say that nicely... No there's no way to say this nicely... the UK will now have to deal with it.

Edited June 26, 2017 by NedaSay

[mawheele]

The SUV will undoubtedly be either XC40 (due this Autumn) or XC60 (based on XC90/S90/V90) chassis based. Even with more money to invest the Porsche Macan is an Audi Q5/A4 chassis. Almost impossible to be a bespoke alloy chassis. Geely have already used the XC40 for the new Lync&co car and I would bet good money they'll use that again for Lotus. Expect the availability of this car to shake up the dealer network as well. 16 dealers will be totally insufficient for the volume expectations. No point doing it for less than 6000-7000 units a year and Lotus have never done that.

 

 

[NedaSay]

Luckily Lotus could soon be unleashed worldwide thanks to Geely proposing/asking/ordering Volvo dealers to have a lotus showroom at their dealership... As Volvo as global presence that would allow Lotus to kick it into a much higher gear. While Geely will probably provide their own dealerships in China.

As for the SUV, I think the number one distinctive attribute will be a full aluminium body and chassis, then a size bang in between the XC40 and 60.The chassis will be the same as theirs but where you'll find solid strength steel in the Volvos your more likely to find an alloy like Boron or high grade aluminum in the Lotus.

of course this is purely conjecture on my part but they've done the study on the Venza and they can translate that knowledge to Volvo.

 For the record the XC40 and 60 share the same basic architecture called SPA (Scalable Product Architecture) the XC40 platform is know as CMA for Compact Modular architecture which will be dedicated mostly to smaller cars, funny enough the SPA is front wheel drive only but package protected to go rear wheel drive for some reason, there's more than enough room in the engine bay to fit an engine longitudinally if ever they wanted to do it. Which Volvo said they wouldn't.

[C8RKH]

8 hours ago, auRouge said:

SUV will be a normalish car... mass production will need mass production materials with a hint of lightweight thrown in... it's a moneymaker not an eccentric fast family car. They need it to generate profits to allow the sports cars a future. 

Nobodies mentioned the elephant in the room!

BREXIT!!!!!!!!! just as our carmaking industry was gathering pace CEO's and controlling stakeholders at BMW (brother and sister have pledged Electric Mini to Netherlands or Germany to protect euro), Nissan and Toyota are all prepared to move business because of the tariff threat.. 

"No deal is better than a bad deal" ffs??‍♂️

 

I tell you what, FFS, let's just wait and see what happens before all the doom and gloom shall we!  For crying out loud you, me, and no one else has a bloody clue how this going to play out so just calm down and go and make a cup of tea!

Oh, funny how you're happy to be all negative about Brexit but forget conveniently about the devaluation of the GBpound and how it is powering our exports. So yes, raw materials dearer to bring in, but our products are still competitive to export thanks to the lower pound.

[KAS-118]

38 minutes ago, C8RKH said:

I tell you what, FFS, let's just wait and see what happens before all the doom and gloom shall we!  For crying out loud you, me, and no one else has a bloody clue how this going to play out so just calm down and go and make a cup of tea!

Oh, funny how you're happy to be all negative about Brexit but forget conveniently about the devaluation of the GBpound and how it is powering our exports. So yes, raw materials dearer to bring in, but our products are still competitive to export thanks to the lower pound.

British labour costs are also comparatively much cheaper - to be honest at £1 = €1.40 pre-Brexit the pound was overvalued.

As for the SUV I think that should be left to Volvo and, as I've said before, Lotus produce s proper 4 seater coupe along the lines of the Elite/Eclat

[Bravo73]

10 hours ago, auRouge said:

Nobodies mentioned the elephant in the room!

BREXIT!!!!!!!!! just as our carmaking industry was gathering pace CEO's and controlling stakeholders at BMW (brother and sister have pledged Electric Mini to Netherlands or Germany to protect euro), Nissan and Toyota are all prepared to move business because of the tariff threat.. 

Nope, that's why my best guess is that 'limited production will be kept at Hethel for the limited UK market'. The majority of production will be moved overseas. 

[C8RKH]

http://news.sky.com/story/toyota-hands-163240m-investment-boost-to-uk-plant-10803437

https://www.topgear.com/car-news/insider/nissan-commits-british-plant-two-new-cars

From Llloyds latest automotive sector report:

And businesses do see opportunities from Britain’s exit, chiefly through less bureaucracy and regulation (35 per cent), more competitive exports from the ongoing weakness of sterling (34 per cent), more opportunities for mergers and acquisitions (28 per cent), and improved international trade agreements (28 per cent). The British automotive sector employs some 169,000 people directly in manufacturing, including some of the world’s most-skilled engineers, with more than 30 manufacturers building more than 70 different models

It takes time to build that experience and expertise and you cannot just create it over night. British plants have some of the best productivity and quality records of any automotive plants in the world, and whilst nothing is guaranteed, we export cars to over 160 markets, albeit 50% do go to Europe. but then, if they stop making Mini's here, how many will stop buying them?  Trade is a funny old thing, especially in established markets, and in the past, the average British Consumer has responded well to British made goods when their industries are under threat and imported mini's will be a hell of a lot more expensive here!

[NedaSay]

 

There, there you guys... at peace now.

Here's the main quote I guess people will want to read:

Quote

"This is just like what we have done with London Taxi Company, engineer in Britain, design in Britain, built in Britain. We see no reason to move fifty years of combined experience to China – let them do what they do best – in Britain.

https://www.autocar.co.uk/car-news/new-cars/lotus-production-continue-norfolk-could-also-begin-china-says-geely-owner

 

Luckily Lotus could soon be unleashed worldwide thanks to Geely proposing/asking/ordering Volvo dealers to have a lotus showroom at their dealership... As Volvo as global presence that would allow Lotus to kick it into a much higher gear. While Geely will probably provide their own dealerships in China.

As for the SUV, I think the number one distinctive attribute will be a full aluminium body and chassis, then a size bang in between the XC40 and 60.The chassis will be the same as theirs but where you'll find solid strength steel in the Volvos your more likely to find an alloy like Boron or high grade aluminum in the Lotus.

of course this is purely conjecture on my part but they've done the study on the Venza and they can translate that knowledge to Volvo.

 For the record the XC40 and 60 share the same basic architecture called SPA (Scalable Product Architecture) the XC40 platform is know as CMA for Compact Modular architecture which will be dedicated mostly to smaller cars, funny enough the SPA is front wheel drive only but package protected to go rear wheel drive for some reason, there's more than enough room in the engine bay to fit an engine longitudinally if ever they wanted to do it. Which Volvo said they wouldn't.

Edited June 26, 2017 by NedaSay