Lotus:- The End?

[bobo]

all valid points if you still consider the domestic market as a priority. personally i would wager that any new plan either upscale or downscale will completely disregard the domestic market. the numbers arnt strong enough as well as being saturated for part of the product, as you have recognized in other words.

the problem is historically the co hasn't been run by guys that actually understand money.

DanL said:

Apologies, long rambling post coming up!

The problems Lotus have are three fold to my mind - the economy, the niche markets they work in due to the car line up, and the size of the company.

We're still in recession/recovering from a recession, and this leads to fewer people willing to throw money at a weekend toy. Food on the table and a buffer in case of redundancy are more important.

There are, granted, people willing to compromise enough to run one of the cars as a daily driver, but these people are, I imagine, generally younger men and as a result generally don't have £30k lying around to buy a new Lotus - they're more likely to spend half that on a used one, which is fine, but doesn't help Lotus overly. Alas on "normal" career paths the younger guy either doesn't earn enough to buy one, or works in a bank earning "too much" and buys the traditional 911 instead, skipping over the Lotus.

The cars they produce aren't selling (for whatever reason) in large enough numbers - I'd argue it's price and positioning personally... 30k is a lot for a car which isn't quite as track focussed as a Caterham, or as usable as a daily "sports" car when compared to a Z4/TT/Boxster/whatever. 60k is an awful lot to ask for a car if it's the only sports car in the garage (I believe people will opt for the more prestigious badges instead), and it's not an obvious one to add to a collection of cars.

The two issues above wouldn't be too much of a problem if Lotus were a Caterham sized business, but they're not. Too large to be a small volume manufacturer and get away with it, too small to be able to compete with the big boys - their fixed costs will be what kills them in the end I suspect.

Edited by DanL on Tuesday 16th October 13:52[/footnote]

[footnote]Edited by bobo on Tuesday 16th October 14:05

[Tuna]

C1RVY said:

Tuna said:

No-one is buying Evoras, or Exiges, or Elises either.

I think there are an awful lot of people waiting to buy Exiges, & loads more wanting to be given the chance to buy one!!

Indeed. My point was that there are a bunch of people on here saying that the products are wrong and claiming the fact that virtually none have been sold in the last year proves it. The thing is, Lotus have so many other things going on right now that discourage or prevent people buying their cars, that it's impossible to say anything about how good their products are (in terms of how many customers they might actually attract).

Discussions about product fit and market size are irrelevant if you can't actually serve any of that market with any of your product.

Edited by Tuna on Tuesday 16th October 15:22

[Tuna]

DanL said:

We're still in recession/recovering from a recession, and this leads to fewer people willing to throw money at a weekend toy. Food on the table and a buffer in case of redundancy are more important.

Disagree. 10,912 people bought Porsches in one month this summer. In the market Lotus are addressing, cost and practicality are not so constrained.

We've had this discussion before anyway. If you want a cheap, practical car, you can't beat the established global manufacturers and Lotus is absolutely in the wrong place to even consider it.

[otolith]

DanL said:

buffer in case of redundancy are more important.

There are, granted, people willing to compromise enough to run one of the cars as a daily driver, but these people are, I imagine, generally younger men and as a result generally don't have £30k lying around to buy a new Lotus - they're more likely to spend half that on a used one, which is fine, but doesn't help Lotus overly. Alas on "normal" career paths the younger guy either doesn't earn enough to buy one, or works in a bank earning "too much" and buys the traditional 911 instead, skipping over the Lotus.

The cars they produce aren't selling (for whatever reason) in large enough numbers - I'd argue it's price and positioning personally... 30k is a lot for a car which isn't quite as track focussed as a Caterham, or as usable as a daily "sports" car when compared to a Z4/TT/Boxster/whatever. 60k is an awful lot to ask for a car if it's the only sports car in the garage (I believe people will opt for the more prestigious badges instead), and it's not an obvious one to add to a collection of cars.

A substantial part of their problem is that people think they should be able to have niche low volume cars for mass produced money. Something like an MX-5 or a 135i is always going to be better value for money, but that's achieved at the expense of making the car what the man on the Clapham Omnibus would like to be driving. If you don't have mass-market tastes, you can't avail yourself of mass-market bargains.

[Bitofbully]

Tuna said:

Disagree. 10,912 people bought Porsches in one month this summer. In the market Lotus are addressing, cost and practicality are not so constrained.

And why did nearly 11k people buy a Porsche in on single month? - because they're a practical everyday proposition, rather than a toy that'll do a few k miles a year when the sun shines.

So the choice for Lotus, as I see it, is to downscale and made stripped out cars for enthusiasts, as do Caterham - or to make their cars more usable, which is where I thought they were going with the M100.

[RYH64E]

Bitofbully said:

And why did nearly 11k people buy a Porsche in on single month? - because they're a practical everyday proposition, rather than a toy that'll do a few k miles a year when the sun shines.

So the choice for Lotus, as I see it, is to downscale and made stripped out cars for enthusiasts, as do Caterham - or to make their cars more usable, which is where I thought they were going with the M100.

Making their cars more usable isn't going to be enough, Porsche and others already have the usable sports car market covered. Taking on Porsche in their own market sector is going to be a huge task, Porsche are very good at the details that Lotus aren't used to addressing, and 9 out of 10 peple are going to choose the porsche brand over the lotus alternative - even if the Lotus is better and cheaper (which it isn't currently).

[bobo]

Bitofbully said:

And why did nearly 11k people buy a Porsche in on single month? - because they're a practical everyday proposition, rather than a toy that'll do a few k miles a year when the sun shines.

So the choice for Lotus, as I see it, is to downscale and made stripped out cars for enthusiasts, as do Caterham - or to make their cars more usable, which is where I thought they were going with the M100.

ok looking at this point blank... the former isn't a viable business case assuming the current financial position. how would you convince an investor to fund/exiting debt underwriter to renegotiate terms on an idea that has no way of ever breaking even/already carries insurmountable debt, unless you completely dismantle the actual business down to almost no fixed costs? and then wheres his upside relative to risk/exiting equity? yes he cuts his losses but that's taking a mother of all hits... cant see it...

i can certainly see bona fide management making money out of the company long term, putting the debt to one side, the ingredients are there, i'm certainly not as negative as you lot. the last thing the existing underwriters of the debt want is it to fold, they will love to accept terms from a major player that will take it on and there's a few that would have relative synergy.

that's my view and i'm positive as even total collapse means I wont have to put up seeing the s2 regurgitated for yet another 10 years! lol

[cardigankid]

One day they will come back, and what they will need is something better and cheaper than the likes of Porsche, not impossible, surely, bigger than what they are currently offering, and not made of what is seen as plastic.

The new Range Rover is lighter than the last one, but it sure isn't smaller. In today's driving conditions, that is what people want.

[Meteor Madness]

Tuna said:

Disagree. 10,912 people bought Porsches in one month this summer. In the market Lotus are addressing, cost and practicality are not so constrained.

We've had this discussion before anyway. If you want a cheap, practical car, you can't beat the established global manufacturers and Lotus is absolutely in the wrong place to even consider it.

I didn't realise they were that common !

[Agem]

So, what are we saying..........they toast by months end?
Mike

[cardigankid]

Don't worry guys. If they go down the debt is wiped clean, and someone will buy the company, hopefully someone who can make something of it. The key is who, and what they decide to do with it.

I thought that Aston Martin was finished, back in December 1974, when Company Developments went down, Look what has happened to them since.

No company with that back catalogue of great cars, how many World Championships, and those drivers, Clark, Hill, Fittipaldi, Andretti, and the rest, is going to disappear. Colin Chapman, a flawed genius perhaps, but as much of a genius as any of the motoring greats.

Edited by cardigankid on Wednesday 17th October 08:31

[Throttle Body]

cardigankid said:

Don't worry guys. If they go down the debt is wiped clean, and someone will buy the company, hopefully someone who can make something of it.

Yes. If they go bust, the factory and tooling are still there, but the debts are written off. Perhaps the Evora will sell quite well for £45k.

Didn't something like this happen with the M100?

[C1RVY]

Agem said:

So, what are we saying..........they toast by months end?
Mike

Wow, as long as end of the month eh! On here, you'll be flamed for being an optimist, I think most them reckon it'll be curtains by next Wednesday, FFS !

[Scuffers]

Throttle Body said:

Didn't something like this happen with the M100?

no, the rights were sold to Kia, they make a mess of it.

[Tuna]

Throttle Body said:

cardigankid said:

Don't worry guys. If they go down the debt is wiped clean, and someone will buy the company, hopefully someone who can make something of it.

Yes. If they go bust, the factory and tooling are still there, but the debts are written off. Perhaps the Evora will sell quite well for £45k.

In your dreams. If they go bust, the factory and tooling would be sold off to repay their creditors. There is no reason for DRB to let them go bust, but they could choose to break up the company as a loss maker and sell off it's assets to various competitors. In both scenarios, the best you could hope for is that VAG buys the name and sticks Lotus badges on a rebodied Audi TT. There is absolutely no reason for Lotus to remain a going concern if DRB don't support it fully.

[Tuna]

Bitofbully said:

And why did nearly 11k people buy a Porsche in on single month? - because they're a practical everyday proposition, rather than a toy that'll do a few k miles a year when the sun shines.

And the Evora/Exige are rebodied Trabants? Why don't you say "Loads of Trouble, Usually Serious" whilst you're at it?

[Bitofbully]

Tuna said:

Bitofbully said:

And why did nearly 11k people buy a Porsche in on single month? - because they're a practical everyday proposition, rather than a toy that'll do a few k miles a year when the sun shines.

And the Evora/Exige are rebodied Trabants? Why don't you say "Loads of Trouble, Usually Serious" whilst you're at it?

I think you're over-reacting.

A Lotus is a pretty focused sports car, but not one which a majority of people will want to drive on a daily basis.

[marshalla]

Bitofbully said:

I think you're over-reacting.

A Lotus is a pretty focused sports car, but not one which a majority of people will want to drive on a daily basis.

Wrong, wrong, wrong, wrong, wrong. I drive my Lotus every day and it's not a compromise, it's a perfectly usable coupé. SOME Lotuses are "pure" sports cars, but the Chapman plan was to break that and move into the every day market. This was done quite successfully (in technical terms).

[Bitofbully]

marshalla said:

Bitofbully said:

I think you're over-reacting.

A Lotus is a pretty focused sports car, but not one which a majority of people will want to drive on a daily basis.

Wrong, wrong, wrong, wrong, wrong. I drive my Lotus every day and it's not a compromise, it's a perfectly usable coupé. SOME Lotuses are "pure" sports cars, but the Chapman plan was to break that and move into the every day market. This was done quite successfully (in technical terms).

Well, a couple of things - what you find acceptable isn't what everyone else finds acceptable, and the modern range offers too little car for too much money.

[marshalla]

Bitofbully said:

Well, a couple of things - what you find acceptable isn't what everyone else finds acceptable, and the modern range offers too little car for too much money.

Now, that's different. Modern Lotuses do not, IMHO, follow the Chapman plan and were, mostly, track-day toys up until the Evora. The Evora fails, though, by not taking into account the fact that the average rear-seat passenger can't see out of the side window.

However, it doesn't stop me pointing out that not ALL Lotuses are sports cars. Some are GTs and quite useable as every day cars. (just not anything produced since 1992)