Future of Lotus

[NedaSay]

7 minutes ago, C8RKH said:

That wasn't bad luck. There was nothing lucky about it...

the crisis started at the launch of evora really and then getting a loan became very difficult.

[C8RKH]

I was referring to DB and his obviously excellent decision making skills and his resistance to wasting huge sums of cash on frivolous things and his grounded approach to growth.

[scotty435]

Think there are more pressing things on people’s minds at the moment. I think we are all hoping for a bit of good luck if you believe in such things. Sure this topic will be more relevant in some time in the future, when? that’s anybody’s guess. In the meantime please keep safe.

[Bibs]

Geely interview with Matt Windle, Executive Director of Engineering. 

http://zgh.com/media-center/story/interview-matt-windle/?lang=en

[Techyd]

His interpretation / understanding of 'For the Drivers' wasn't what I was expecting to read at all, and not in a good way.

It's not about "Putting the customers first", its not about the "purchasing experience" and its not about "deliberately designed controls so they're all easily accessible".  That's not to say this stuff isn't important, it completely is; its just that this criteria is what we expect from every company we purchase a product from; they underpin the end product for sure in a way that ensures people have the confidence to engage with, and purchase from, Lotus cars.

"For the drivers" for me is more about the philosophy behind the product itself, not how you get there or indeed, in it!  The connection with the road, the feel of the controls, the emotion and joy from driving experience.  It maintains the link with Lotus' past (being light weight, being about the corners, less being more etc etc) and takes it forward.

I'm reasonably confident from what I've seen in and around this phrase from them in other content from Lotus recently (in particular Russel Carr) that it IS about that.  But hearing Geely's executive director of engineering not reference any of that does give me cause for concern that this nuance is being overlooked from up high and that potentially, we'll be relying on the hardcore of Lotus' employees in the development and manufacturing teams to make sure that magic still happens!

[C8RKH]

For an engineering director to be focused on customer "journey" is just downright disappointing for me. I want an engineering director to focus on driving dynamics. Handling. Stability. Reliability. Noise. etc.  Leave the bloody customer journey to marketing and after sales.  I'm getting worried re the future now.

[C8RKH]

I guess you can see why Geeley would be keen to take Lotus upmarket if these "profit per car" figures for Ferrari are to be believed.  Almost £80k profit on each car they sell is a great figure. If Lotus tried the same thing that would the GT410 down a around a £140-150k car given the extra cost they would need to invest in the interior quality and design? It would be interesting to understand McLaren's figures.

Last year, the once-hot automotive market began to show signs of cooling. Sale still topped an astounding 17.1 million vehicles in the U.S., but that was down from 2018. However, 2019 wasn’t all bad for every automaker. Ferrari, for example, sold 10,131 cars, and made a killer profit on each of them, too, according to a new report from Fiat Group World, an unaffiliated Fiat Chrysler Automobiles website.

The website reports that Ferrari sold 10,131 cars with a 23.2 percent operation margin on each of them, which comes out to €86,369 ($94,474 at current exchange rates). That’s a significant amount of money, though not as much as the automaker made in 2018 – €86,801 ($94,947). Fiat Group World says Ferrari achieved its impressive margins through adopting new technologies, adapting to market changes, and marketing its vehicles.

[KAS-118]

Here's a new article on the forthcoming release.

I guess its nothing too new - confirms that its priced between £55,000 to £100,000; but it suggests that this will be its 'last' combustion engined car. So whether they classify a hybrid as being 'combustion' engined might be significant. 

https://www.bloomberg.com/news/articles/2020-04-21/lotus-is-gearing-up-to-make-a-car-you-can-drive-every-day?srnd=markets-vp

[scotty435]

Thanks KAS interesting article 👍

[Likuid]

11 hours ago, KAS-118 said:

Here's a new article on the forthcoming release.

I guess its nothing too new - confirms that its priced between £55,000 to £100,000; but it suggests that this will be its 'last' combustion engined car. So whether they classify a hybrid as being 'combustion' engined might be significant. 

https://www.bloomberg.com/news/articles/2020-04-21/lotus-is-gearing-up-to-make-a-car-you-can-drive-every-day?srnd=markets-vp

Yeah kind of crazy. I mean I would still call a hybrid a combustion engine car even if its not the sole propulsion method, but maybe they mean strictly combustion. Either way its kind of sad, however if they nail this next car out of the park I will be there, especially if its not a hybrid. It will most likely be one of the last few manual sports cars manufactured, looking at where things are headed.

[NedaSay]

I would not lend too much credit to this Bloomberg piece, as the price bracket they are giving is so wide 55 to 100k... that would be an Exige replacement, all the rumours have pointed to an Esprit class car, and the latest leaked pics point to a car bigger than the Evora in size... So doubtful that much car would retail at 55k entry price or not. if they do it, it means that they have gone back to JMG business plan and that plan was idiot proof in my opinion.

https://europe.autonews.com/automakers/lotus-will-launch-entry-level-car-daily-use

https://www.roadandtrack.com/new-cars/future-cars/a32235575/lotus-entry-level-daily-driver-confirmed/

Then i do think Lotus will jump into EV but, I seem to recall one executive saying the ones coming after the "interim car" would be hybrids, I think all cars will have some level of electrification, even that interim car could have electric supercharger and a 48v battery making it essentially a soft - non plug in - hybrid. The team design team has been on a roll lately,  so I'm confident the car is going to be a looker while the parts bin they have access to is plethoric and easily customizable. The propulsion system is still a bit of an unknown but should be quite potent. At this point they just have to execute the plan well and Sales and support function have to deliver on what they promised to offer. 

Edited April 22, 2020 by NedaSay

[The Pits]

I think the reality is the next car was running behind schedule and over budget anyway. The corona virus not only changes the landscape they will be selling into it's also the ideal opportunity for them to reappraise the plan as they now have the perfect excuse for being so late. The longer they take the less interest there will be in a combustion engine car as such a thing will have a short shelf life and reduced return on the investment. Also the decision to neglect the existing range is looking like an increasingly bad call, that was based on a new car being rushed to market sooner plus general lack of interest among new management. Again though, corona virus will be used to explain some catastrophic sales numbers. A get out of jail card in many ways for the new management who were in for a severe hairdryer treatment if not given a final ultimatum depending on how Evija sales are really going of course. Geely have been very clear about their ambition to be world leaders in 'electrification and autonomous driving'. Whatever the deal was with Lotus the terms will be changed to suit whatever Geely's plans and priorities are now. We are already in a different world, one unrecognizable from 6 months ago. Don't forget they will be facing massive challenges of their own now post this virus. Lotus will have to like it or lump it.

[C8RKH]

There seems to be a good supply of Evora GT cars in the US now, I was wondering if anyone over there had any ideas/views on how sales were going? Also, the number of positive videos/reviews for the cars there from owners is outstanding. Lotus really did mess out in not prioritising better the models/needs/desires of our US cousins as I reckon done properly they could have easily shifted a 1000 Evora's a year in that market with help from customer recommendations, blogs, videos and a decent dealer network!  I guess it is easy to look from the outside, without any constraints, and be the expert on where they got it wrong and what could have been.

A 500 bhp Evora, for less than a price of a 911turbo, that would defo sell in my mind in the US, and probably sell 30 odd in the UK.

[The Pits]

US is a tricky one, federalising cars is a deliberately expensive and time consuming process. They are very late to the party with the GT and the road legal Exige is an obvious casualty of the legislation which is an effective form of protectionism. It's also harder to compete with US sports cars once you have jumped through all the hoops with the new Corvette available for peanuts and a brand new Mustang with all kinds of bhp costing loose change. It goes without saying that Lotus would liked to have done more in the US. No idea how the GT is really going but doing everything they could to lower the price as standard was necessary and appears to have worked. Deal is the same, you have to go out of your way to know the GT exists, to find out what it is, what it's good at and have to look past many cheaper, more powerful alternatives to end up buying one. Without GT sales from the US to prop up the production figures Lotus would surely be posting their worst year ever?

[jep]

Lack of dealers and top-notch professional marketing must be a major issue for Lotus in the US. I would have thought it impossible to fix those two sores without an increase in volume. As Lotus Cars have failed to increase volume to a level where they have the scale to do the US properly, I cannot see any other way forward than the Geely plan, which is to increase Lotus Cars sales worldwide to previously unseen levels.

Hence my question to put to Geely via Bibs (today): what car do the Lotus management think will attract buyers to the marque who currently do not buy a Lotus? 

I very much doubt the answer will be to make a car similar to the vehicles Lotus have made for the last 60 years. The Evora is a stunning car but did not sell as required. If Lotus Cars is to survive, they have to change the products they supply to the market. If they make cars I do not like, so be it; my hope is that by being profitable for the long term, they will then be able to also produce some more 'traditional' Lotus cars. And even if they don't, at least they will be in existence to supply the parts I need to keep my older Lotus on the road.

Justin

 

 

[LotusLeftLotusRight]

I’m not so sure that the Evora GT is selling well in the USA. Have you seen the dozens and dozens of new cars that pop up for sale at dealers on the eBay USA thread on here? In fact it seems to be a quite different sales strategy to the UK. Presumably most new Lotus buyers here want to spec their own car at their preferred dealer on a new-build lead time. Sure they might be tempted by an available demonstrator at a good discount. In the USA it seems to be more a case of customers generally buying from the available dealer specced stock. In which case the US dealers are battling with each other over the same customers and the skill for the dealer is in striking the right balance of colour/spec. versus price.

[rallyesax]

Also, I'm not really aware of the taxes that apply to different countries in Europe or worldwide when buying a new sport car but for example in France currently :

Go buy a brand new Exige 350 Sport. Price is about 80 000 to 85 000€. Of course you have to pay for the certificate like every car in order to have a licence plate. Not expensive, it's about 1200€. BUT! Now you have to pay an extra tax of... 20 000€!!! Just because of its CO²/km value. It's 25% of the cost of the car you have to add! Makes it crazy expensive for the entry level of the Exige 100k€ or more (87 or 90k£) 

France is a small market of course for car makers, even if Lotus sells some here I believe. But if other countries do apply crazy taxes like this, it makes it quite impossible for a small car maker to sell cars like those. 

The Elise is quite OK it's about 3500€ tax 'only' 

[The Pits]

An entirely reasonable if somewhat bleak way to look at it @jep. My concern is that Lotus is one of the few car makers left that offer something for those who aren't so keen on the current industry trends and direction sports cars are taking. My own personal view is that there's an opportunity for a company taking a different path - a much bigger opportunity than just another 'me-too' approach. Lotus has always been a challenger brand, they just never had the money to leverage that like say Apple, Dyson, Ben & Jerries or Virgin Atlantic did. All are massive mainstream brands now but they were all outsiders, upstarts, innovators and game changers. All attractive qualities when competing with monolithic corporations. Heck even VW started out as the oddball, left field choice in the 1950s. Lotus make better sports cars for those who actually want to feel the process of driving. The fact that so many people don't know that or get that is a communication issue not a product issue. This is the crucial mistake I believe the current management are making because they don't really 'get' the current range. The difference between a Lotus and the increasingly numb, heavy alternatives is getting greater all the time. If the place is being run by people who prefer the heavy, numb, tech-laden 'your grandmother could drive it' cars then there is your problem. There is so much to lose by adopting a 'lets do what they're doing approach'. I don't think the current management can see the wood for the USPs! The one thing we've missed to date is Lotus genius with a big development budget. The copy Porsche approach will restrict creativity, ingenuity and passion for intelligent, lightweight engineering if it hasn't already. I don't believe anyone wants a Porsche clone built in Norfolk. The more like a Porsche it is, the fewer reasons to buy one. Besides, Lotus have been here before and it didn't work last time.

If it was as simple as changing the product then the Evora would have sold more. It's clear that a combination of things was holding buyers back. Everyone has their own theories but no-one has the definitive answer as to why. Praise in the motoring press was absolutely glowing, including Evo Car Of The Year, so it wasn't that. The Evora was launched as a more refined, more accomodating, more usable type of Lotus, exactly what they are aiming at now. It was directly inspired by the 911, the best selling premium sports car after market research revealed that more Elise owners progressed to 911s than any other car as their circumstances changed. Made perfect sense to offer them a 6 cyl, 2+2 Lotus alternative given that they were not averse to the Lotus brand as many Porsche owners are. Ambitious kerbweight targets were set aside which is more reasonable enough when all your other cars are around 1000kg or less. It was a direct answer to the same problem - to move Lotus away from austere track cars. It didn't work. Huge success as a car but not transformative to the business as Lotus had hoped. Lots of intangible and emotional reasons involved. For a start many of those ex Elise buyers always wanted a 911 from the start, the Lotus was just a stepping stone until they could afford a 911. The Evora didn't change or challenge that. Copying Porsche again isn't just dumb and unimaginative it's what worked for Porsche 20 years ago. They should be more concerned with what companies like Porsche are doing to be selling cars in 20 years time. Whole different world now. Time for some bold, lateral thinking.

[geartox]

@rallyesax 

Agreed with you, taxes are now becoming completely crazy in France. The market is dead for me now.

 

[Akajak]

IMHO-the new owner needs a well regarded big seller of any type .

the new owner has a clear direction which does not include low volume petrol only niche cars

hope I’m wrong but cannot at moment see how they will be able to achieve that big selling vehicle

[The Pits]

Another opportunity for a quick thinking company to look into. Chapman famously and ingeniously exploited a tax loophole to help make the 7 a success.

Although frustrated by the current management to date I think in fairness the job requires a brilliant, passionate, visionary dictator to really deliver on the huge potential Lotus has. My impression of Popham so far is that he's very much a 'company man', pragmatic but none of those other things. However, perhaps a visionary leader at Lotus would immediately clash with Geely and not last long enough to realise his vision? Popham clearly knows how big car companies work and how to play the game. Perhaps that's the only way it would ever work with Geely and perhaps that's all there is left now in the car industry anyway. I'm not sure anyone gets to be a visionary dictator nowadays unless they own the place, although I think JMG had a right go at it! Clearly wasn't what Geely wanted. Trouble is all we have seen to date is a continuation of his plan. Still not at all clear what Popham's big ideas are and what direction he wants to go in. With JMG it was. Make everything lighter, faster, louder, harder, more expensive. Release lots of models to ratchet the prices up to the point where the cars make a profit. Find buyer. Launch electric hypercar to elevate the brand and make some headlines and online chatter. Launch cheaper lookalike based on Evora platform and running gear. Launch SUV. Explore other sectors. I know that Lotus were considering a city car, hot hatch, saloon and SUV back then because I was invited to a focus group and we were all shown various design sketches.

Popham? Really not clear yet how his vision deviates from the JMG plan. After 2 years in the job.

[yeller77]

As to the US, Lotus' biggest failing here has been/is the limited dealer network and weak leadership, either in haphazard management or limited leash from the mother ship, or both. In this day of internet sales, the location of the sales source matters little, but it's the aftersales service, warranty work, etc. that scares people off. They would have done well long ago to establish a network of authorized service centers to manage this, but they have been too concerned about the preservation of the profit margin of the individual dealers which is meager enough. This is cutting one's nose to spite their face as sales would otherwise be increased in markets not otherwise served, and virtually all of the dealers survive by selling other brands anyway. In the city where I live, there are no Ferrari, Lambo, Aston, Bentley, or Mclaren dealers, the closest being 3 hrs away, yet there countless of these exotics here including not one, but two Sennas! I know of one Evora 400 and less than a handfull of early Evoras. Exotics people have no problem putting their cars on a truck to ship them 3 hrs away for service. Those who buy $50-150k sports cars have no interest in doing that, and there are plenty of anti-Corvette and anti-Porsche people who would enjoy a driver's car that sets them apart from the rest provided there is potential for ownership satisfaction. The Alfa dealership has enjoyed reasonable success locally in that same vein, though it helps to have FCI behind you. Geely/Volvo/Lotus seem to have done little to capitalize on their relationships in taking advantage of the broad network of Volvo dealerships in the US, yet another opportunity to provide a broader brand presence. I'll wager that 99.9% of the car buying public have no idea that the three companies are related. Sure, you have to crash a few cars and tweak the emissions to sell them in the US. Who knows, maybe Evija sales are part of a grand plan to offset brand emission and mileage requirements. I have enough faith in Lotus Engineering to think that they could go far enough on the design end to minimize required attrition on the front end. In the end, it'll be all up to Geely to want to make things happen.

[Mark030358]

3 hours ago, The Pits said:

I'm not sure anyone gets to be a visionary dictator nowadays unless they own the place, although I think JMG had a right go at it!

All this guy did was take more money for less product (with his  penny pinching) and also was not entirely  honest  with his customers ie models (please don't get me started on that)...

Lets hope the next car is masterpiece  👍🏻

[The Pits]

I was referring more to the dictator part with JMG.

But isn’t less for more precisely what Porsche Motorsport and all its equivalents do to rapturous applause? At least with Lotus, less car = more Lotus. Removing 100kg of car worked wonders on the GT430 and all of the JMG era cars drove spectacularly well, not least the Sport 380.

JMGs strategy had many downsides but he didn’t have half the options open to him that the current lot have. At least there was a clear plan, good enough be left to continue unchanged by numerous business brains since by the look of it.

[jonwat]

Lotus Pistonheads article