Let The Lotus Deathwatch Begin. Or Shall We Simply Pull The Plug?
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.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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