By on January 15, 2013

The Paris Five. All aborted

Another inspiration for wet dreams of easily impressed juvenile car bloggers is dying, is bleeding to death and has a “do not resuscitate” note nailed to the head.  Lotus has been given up for dead.

Blogs from autoevolution all the way to our sister pub Autoguide reprint the happy PR fluff that Lotus wants to “boost sales five times by 2015.” With sales crawling along at homeopathetic 1,043 units allegedly produced in 2012, making 5,000 by 2015 doesn’t sound like such a big deal. Trust me, it is if you want to sell them also. By 2015, the Lotus cars will still be sitting on technology that is ripe for the museum, and there is no relief in sight. Only poor car bloggers would be a target group ripe for a 20 year old Lotus – if sold used, preferably with a salvage title.

Paultan.org is a blog that has boots and ears on the ground in Kuala Lumpur, and it actually goes to press conferences given by Lotus owner DRB-Hicom. Paul Tan reports that if you’ve been waiting for the new Lotus Esprit or Elan, or any of the five Lotus concepts that had been shown 2010 Paris motor show (yes, that far back) you need to abandon all hope. They won’t happen, DRB-Hicom group Managing Director Datuk Seri Mohd Khamil Jamil told the press in KL. And by the way, plans had been cancelled even before the DRB-Hicom acquired Proton. As in: Forget about it. We never meant it.

Says Paul Tan: “The ‘Paris five’ were the Esprit, Elan, Eterne, Elite and the new Elise, which was supposed to replace the current one.”  No replacement für Elise, sorry.

Mohd Khamil told the press that Lotus must soldier on with the already ancient metal. “They may be old, but they remain good cars and there is still demand for them,” Mohd Khamil said. What else would you say in his shoes?

Khamil held out the possibility of a new Exige and Evora for after 2015, an announcement nobody can take really seriously. Development takes money, and there is none. A $434 million loan from six financial institutions has been used up, Khamil said.

Monday press conference: All peachy in non-car sectors

There is little chance for fresh funds:

Lotus may be famous for its cars, but the most memorable achievement was “making losses for the past 15 years,” as the Business Times reports from Kuala Lumpur. This achievement was crowned by a “record loss” of $185 million last year, as the Times of London wrote over the weekend.  The report comes with the good news that “Lotus breached banking covenants on a £270m financing facility. Last January lenders froze funding to the firm.”  Ouch.

At the weekend press conference Mohd Khamil said that the brand is not for sale. A few companies had looked into buying Lotus, or even all of Proton, but they didn’t like what they saw. Rumors that Volkswagen might be interested in buying Proton are floated with regularity in KL, as late as a few days ago, totally unfazed by prior firm statements by Volkswagen’s labor chief and vice chairman of Volkswagen’s supervisory board, Bernd Osterloh, that Proton won’t be bought. Volkswagen has an existing joint venture with Proton, and sees no reason to change that. When Osterloh talks, Volkswagen listens.

The buzz in Malaysia is that DRB-Hicom is stuck with Proton and Lotus which it took over as a favor to Malaysian politicians. In Malaysia, the government likes to “encourage” government-dependent companies to take failures off the government’s hands.  Loss-making companies get passed around to companies who can’t refuse, and get financing from equally hapless government banks or pension funds or state companies.

My contacts in Kuala Lumpur think that DRB-Hicom has agreed to keep Proton alive in exchange for favors from the government. DRB-Hicom is a Malay conglomerate, involved in everything from the Kuala Lumpur Airport, over arms production, all the way to waste management.  DRB-Hicom must remain in the government’s good graces. The question is how long it will be able to tolerate pain and bleeding.

At another press conference yesterday, DRB-Hicom sung the praises of its other sectors, namely services, property, assets and construction, while valiantly holding out the failed prospect of turning Malaysia into an automotive powerhouse. It didn’t work before, and it will work even less in the future. Car producing neighbors Thailand and Indonesia are pressuring Malaysia to remove trade barriers as promised when they signed the ASEAN Free Trade Agreement. Malaysia has sabotaged this as much as it can, but it can’t stop the ASEAN FTA from making Proton less and less competitive, and a takeover target nobody wants and needs.

All of this however never enters a budding car blogger’s wet dreams. That’s good, the young folks should not suffer nightmares at an early age.

 

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20 Comments on “Let The Lotus Deathwatch Begin. Or Shall We Simply Pull The Plug?...”


  • avatar
    Glenn Mercer

    Brilliant! “homeopathetic 1,043 units” — sincerely, what a great and innovative use of that adjective… and unfortunately, painfully, true.

    DISCLAIMER: Readers should note I have no particular anti- or pro-homeopathic medicine stance so don’t bombard me with rants about studies showing how this works or does not work for cancer, hives, or head lice! I was just complimenting the writer on the selection of word.

  • avatar
    Charles T

    I’m looking forward to the “Save Lotus” rallies outside Proton headquarters. Who knows, the supporters might even write a vapid song in support of their brand called “Colin Up”.

  • avatar
    imag

    This is the second time that TTAC has cited Lotus sales numbers for 2012 without any mention of either of the following:

    1. There was a complete production stoppage for almost half the year
    2. There is a sizable waiting list for the new Exige V6. Those orders couldn’t be fulfilled due to #1.

    In other words, SALES WERE NOT THE BOTTLENECK. It is frustrating to watch folks who constantly lecture about poor journalism leave both of these facts out.

    The truth (about cars) is that the Exige V6 is the only truly lightweight supercar. It weighs over 600 lbs less than the last Porsche GT3 with nearly as much horsepower and at a lower cost. It is over 400 lbs lighter than the new FT-86, the new Boxter and the all-carbon-fiber McLaren MP4-12C. What other super/sports car might one buy with those numbers? The only bummer is that we can’t buy a street legal version in the US now.

    In this year, Lotus is further set to further reduce the weight on the Exige with the next iterations. The new traction control has been lauded as the best driver-oriented traction control ever. The steering is far better than any of the new Porsches. So I’m not seeing the dinosaur technology. I’m seeing a brilliant enthusiast car that is getting trashed because the parent company has had issues.

    So please, stop with the lies by omission. 2012 sales numbers were based upon production, not demand. With consistent production next year, a significant jump in sales is not at all unreasonable. The 5000 number may well be high, but it needs to at least be put in a real context.

    • 0 avatar
      gslippy

      Your technical arguments about weight, etc., sound a lot like fans’ defense of Saab. The problem is that apparently nobody cares enough to pay for it.

      You can’t support a car company today on that kind of low volume.

      I can get an FT-86 or Boxster serviced at lots of places. But a Lotus?

      • 0 avatar
        Geekcarlover

        Or if you’re going to be a niche market manufacturer, have something truly unique. Eg Morgan.

      • 0 avatar
        imag

        First off, Saab didn’t have anything NEAR the differentiation that Lotus has. It’s not even close. If you don’t see the difference between the Exige V6 and everything else on the market, then I’m not sure what to say. The closest lightweight supercar is the Noble, and it’s over $250K.

        As far as service, both the Evora and the Exige use Toyota motors and transmissions, which are a positive compared to other exotics.

        Finally, the point remains that citing those volume numbers without discussing the production stoppage is as absurd as talking about 2011 Toyota and Honda numbers without mentioning the tsunami. It’s wrong, and it’s the kind of narrative that doesn’t belong on a site that claims to tell the truth.

      • 0 avatar
        CJinSD

        What was the cause for the 6 month work stoppage?

      • 0 avatar
        imag

        CJ DRB Hicom (the new owner) put a halt to everything as soon as they took over while they evaluated the company and Bahar’s strategy.

        The problem is that DRB didn’t want to buy Lotus – they bought Proton, which owned Lotus. Now DRB is just trying to minimize the losses on the Lotus group. The really unfortunate thing is that, by most accounts, the new Esprit is basically done. It will be a huge shame if it doesn’t see the light of day.

        My point of view is that anyone wishing for the death of Lotus isn’t much of a fan of sports cars. Lotus has some of the best chassis and vehicle engineers on the planet, and that engineering is outsourced to car companies throughout the world. The vehicles themselves provide a much more enthusiast-oriented take on modern sports vehicles, and that’s something that should be appreciated regardless of whether or not you want to buy one. I am not sure what is going on with the left-field attacks on “poor car bloggers”; Lotus is clearly one of the great brands for any enthusiast of the automobile, far more so than Ferrari, which openly scorns its own customers.

      • 0 avatar
        blanks

        Wonder if you can get your Lotus’ engines serviced at Toyota …

    • 0 avatar
      Thinkin...

      Dear sir: Thanks for the wake-up call and excellent points. And I agree – there is truly comparable cars to the Elise/Exige – unless you count the Caterham. (Which is also much in its own class…)

      However, nobody like to have flaws in their arguments pointed out so succinctly, especially bloggers. So don’t expect any great thanks or understanding from the folks at TTAC, but know that you input is appreciated.

  • avatar
    gslippy

    When your product names are a slave to alliteration, the consumer will inevitably get them confused. Worse, they’re all exotic cars with little to distinguish them.

    The Season of Lotus is over.

  • avatar
    Piston Slap Yo Momma

    Bahar’s use of Carrot Top as a celebrity endorsement was my final nail in the Lotus coffin. Seems that if a CEO can fog a mirror nowadays they can rake in the cashola.
    http://img.gawkerassets.com/img/17uru0p5fjtmdjpg/xlarge.jpg

  • avatar
    CoreyDL

    Oh well, Lotus goes away. Just like most other UK sports auto manufacturers.

  • avatar
    fredtal

    Lotus cars as a viable business has always been sketchy. They have made some unique and wonderful cars, regardless of their practicality. I’ll be keeping my 1965 Elan for many more years.

  • avatar
    krhodes1

    I swear there is a contingent on this site who will not be happy until the only cars available for anyone to buy are the Accord and Camry.

    • 0 avatar
      Thinkin...

      Yup. Reminds me of good ol’ Teddy’s famous quote: (Just replace “critic” with “blogger”.)

      “It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.”
      -Teddy Roosevelt, 1910

    • 0 avatar
      Acd

      Reporting negative news about a company does not necessarily equal wanting them to go out of business. As much as we may want them to stay in business and develop future products their current financial situation may not allow it.

      At this point they do not have the money available to develop new models. How does that usually work out for small volume car companies? Plenty of investors were lining up to finance the new line of Studebakers, Jensens, Avantis, TVR’s and Saabs, right?

      • 0 avatar
        gslippy

        @Acd: You are correct. I’d love to see Lotus flourish, but they can’t and won’t.

        Unfortunately, dying car companies always resort to desperate pleas for money at the end, whether through bailout or buyout. Bailouts anger the citizens, and buyouts only appeal to poor investors.


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