RE: Is Lotus in proper bother this time?
Discussion
snotrag said:
Its hardly surprising is it.
All the 'bling' weve had over the past few months, shiny motorshow cars, rappers, music videos..
It really was all just bling - covering up the fact that company has is in deep doo-doo.
What they need is someone who actually knows a bit about running a car company to buy them - strip all the crap out, get rid of the rubbish, tone it down, slow down, and develop ONE, good, well engineered, well priced car. Then start actually selling some.
By far the best way to do this IMO is for input from China/India etc...
Isn't that what they did when they built the first Elise?All the 'bling' weve had over the past few months, shiny motorshow cars, rappers, music videos..
It really was all just bling - covering up the fact that company has is in deep doo-doo.
What they need is someone who actually knows a bit about running a car company to buy them - strip all the crap out, get rid of the rubbish, tone it down, slow down, and develop ONE, good, well engineered, well priced car. Then start actually selling some.
By far the best way to do this IMO is for input from China/India etc...
I wonder if they could have survived if that's all they did - and kept it to it's original values? I don't know enough about the profit/loss they made on the Elise line to even predict an answer.
The article in Evo about them a few weeks back was worrying sounded like they had put the cart before the horse. Nice offices and company cars etc yet not making any money or delivering any cars to people. The Evora could of been a great success had they priced it sensibly and built the S version from the off. I've had 3 exiges and will probably own another at some point in the future and will genuinely be gutted to see them go to ruin. What about all the v6 exige orders surely that will rake a few quid in if they actually deliver them.
Lotus have employed a man that didn't understand the brand or it's values.
His track record is in companied that have much deeper pockets.
He has flattered and wowed the shareholders and blown smoke up their arses by telling them what he could do with thier little company.
Sadly they bought it hook, line and sinker.
They have over extended theirselves and this will not end well IMHO.
Now what did I do with that Mastretta brochure?
His track record is in companied that have much deeper pockets.
He has flattered and wowed the shareholders and blown smoke up their arses by telling them what he could do with thier little company.
Sadly they bought it hook, line and sinker.
They have over extended theirselves and this will not end well IMHO.
Now what did I do with that Mastretta brochure?
It pains me to say this but Lotus appears currently unattractive to any potential buyer.
It's current product range consists of the overpriced, unloved by the buying public Evora, the outdated Elise which despite constant facelifts and 'improvements' is now slower than ever and the yet to appear (to the general public) V6 Exige. The much 'marketed' new cars appear miles away from production. This coupled with the £200 million debt (and no doubt rising) doesn't make for a great investment.
Thank goodness Lotus Engineering would form part of any aquisition, - or would it??
Oh Danny boy - the pipes are calling...
It's current product range consists of the overpriced, unloved by the buying public Evora, the outdated Elise which despite constant facelifts and 'improvements' is now slower than ever and the yet to appear (to the general public) V6 Exige. The much 'marketed' new cars appear miles away from production. This coupled with the £200 million debt (and no doubt rising) doesn't make for a great investment.
Thank goodness Lotus Engineering would form part of any aquisition, - or would it??
Oh Danny boy - the pipes are calling...
Superhoop said:
Hasn't Tony Fernandes (who owns Caterham cars and the mighty QPR) just invested in a new R&D centre not far from Hethel?
Well it was announced that one would be created, but I doubt any money has been spent yet. Ofcourse, Mr Fernandez is well aware of the shenanigans at Lotus and I wouldn't be at all surprised if his planned Hethel R&D centre currently has a Lotus badge over the door.Plenty of people (myself included) predicted during the whole Lotus v Lotus debacle in F1 that Fernandez would be the winner in the end.
Sometimes I just don't get the economics of companies like Lotus. The cars aint cheap - that's because they spend a stack of cash on development, branding, marketing. This I understand... it's not cheap developing anything new.
But the only way to claw back the NRE is to sell, sell as many as possible. The more you sell the more you benefit from scale of quantity and you're bottom line hopefully gets better as your ongoing costs go down. It seems to me that these cars were always just too damned expensive to appeal to enough people because the business model tries to get too much of the development cost back from too few sales.
Drop the margin so that the sale price is closer to cost price (excluding development). This pulls in more buyers, sales volume goes up and you start to win. OK, it takes longer to get the NRE back, but at least you stand a chance.
I've completely over-simplified it I'm sure.
But the only way to claw back the NRE is to sell, sell as many as possible. The more you sell the more you benefit from scale of quantity and you're bottom line hopefully gets better as your ongoing costs go down. It seems to me that these cars were always just too damned expensive to appeal to enough people because the business model tries to get too much of the development cost back from too few sales.
Drop the margin so that the sale price is closer to cost price (excluding development). This pulls in more buyers, sales volume goes up and you start to win. OK, it takes longer to get the NRE back, but at least you stand a chance.
I've completely over-simplified it I'm sure.
Edited by SpunkyM on Wednesday 11th April 13:44
A small addition to this story. It originates with Joe Saward, an F1 blogger. Joe has been consistently spouting venom at Lotus for a long time, but here is the rub. Joe Saward is a board member at Caterham and best buds with Tony Fernandes. I don't know about truth or otherwise but the source is not remotely impartial and if it turns out not to be true, I would think Lotus might have something to say about it. Autocar have lazily regurgitated Joe Sawards blog (which mysteriously came out at the same time as Tony Fernandes tweeting similar rumours)
If a board ember at BMW was to start posting rumours of Mercedes decline on the internet I rather think that he might be facing court case.
Only time will tell.
If a board ember at BMW was to start posting rumours of Mercedes decline on the internet I rather think that he might be facing court case.
Only time will tell.
Well, there are a cohort of industry gurus who joined the ' Lotus Advisory Council' (the 'lac'? really???) and allied their hard-earned reputations to this project in return for a (no doubt large) cheque.
It would be interesting to know what Bob 'car guy' Lutz, Tom Purves, Prof. Dr. Burkhard Göschel, Frank Tuch and Gordon Murray (for it is He) have been advising all this time.
"Sod it Bahar, this plan will take ages. We'll be dead by then. Reveal them all at once, it'll save money on silk and party poppers."
It would be interesting to know what Bob 'car guy' Lutz, Tom Purves, Prof. Dr. Burkhard Göschel, Frank Tuch and Gordon Murray (for it is He) have been advising all this time.
"Sod it Bahar, this plan will take ages. We'll be dead by then. Reveal them all at once, it'll save money on silk and party poppers."
cathalm said:
Joe Saward is a board member at Caterham and best buds with Tony Fernandes.
I wasn't aware of that, however I do sometimes find Joe's blog a difficult read (not just in relation to Lotus) as it's often difficult to tell what is fact and what is merely conjecture. They are often put forward as one and the same.Would their position have been any more attractive had they just plodded on with the Elise / Exige / Evora and Danny et al hand't got involved though?
Seems the change with Proton was the main catalyst for events prompting a review of the current state of affairs at Lotus. Given the Evora wasn't selling prior (or post) Bahar, and the Elise / Exige weren't making any profit - and that Lotus generally hadn't made any profit for 15 years - how would they have been any more attractive to potential new investors had they not gone through the Bahar regime?
Seems the change with Proton was the main catalyst for events prompting a review of the current state of affairs at Lotus. Given the Evora wasn't selling prior (or post) Bahar, and the Elise / Exige weren't making any profit - and that Lotus generally hadn't made any profit for 15 years - how would they have been any more attractive to potential new investors had they not gone through the Bahar regime?
EK993 said:
Would their position have been any more attractive had they just plodded on with the Elise / Exige / Evora and Danny et al hand't got involved though?
Seems the change with Proton was the main catalyst for events prompting a review of the current state of affairs at Lotus. Given the Evora wasn't selling prior (or post) Bahar, and the Elise / Exige weren't making any profit - and that Lotus generally hadn't made any profit for 15 years - how would they have been any more attractive to potential new investors had they not gone through the Bahar regime?
Seems the change with Proton was the main catalyst for events prompting a review of the current state of affairs at Lotus. Given the Evora wasn't selling prior (or post) Bahar, and the Elise / Exige weren't making any profit - and that Lotus generally hadn't made any profit for 15 years - how would they have been any more attractive to potential new investors had they not gone through the Bahar regime?
I'm not sure I understand your point. Surely of his time at Lotus has, in effect, been passive, then hasn't he failed in quite a big way?
I thoroughly agree with those who say that they should have kept it simple, the Elise was a niche product, exciting enough to appeal to entusiasts yet cheap and simple enough to be driven by a wide range of people.
As soon as Lotus step into the world of £50k + cars they are taking on Mercedes, Jaguar, Porsche etc who have the kind of economies of scale, R&D and advanced manufacturing set ups that Lotus could only dream of. With the Elise people will put up with a less than perfect quality becasue it's a cheaper, niche product but people paying £50k+ want perfection, which is pretty much what all the competitors are offering.
My own business is similar, we operate happily in a niche part of our industry, if we tried to go mainstream our competitors who can work on smaller margins and are able to negotiate lower costs would tear us to shreds.
As soon as Lotus step into the world of £50k + cars they are taking on Mercedes, Jaguar, Porsche etc who have the kind of economies of scale, R&D and advanced manufacturing set ups that Lotus could only dream of. With the Elise people will put up with a less than perfect quality becasue it's a cheaper, niche product but people paying £50k+ want perfection, which is pretty much what all the competitors are offering.
My own business is similar, we operate happily in a niche part of our industry, if we tried to go mainstream our competitors who can work on smaller margins and are able to negotiate lower costs would tear us to shreds.
MX7 said:
I'm not sure I understand your point. Surely of his time at Lotus has, in effect, been passive, then hasn't he failed in quite a big way?
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