RE: Lotus jobs at risk

[MJK 24]

Ozzie Osmond said:

MJK 24 said:

Most ridiculous post ever on Pistonheads?!

Let's illustrate the brand's "progress" another way,

Entry level 4-cylinder Lotus in 1984 - 160 bhp.

Entry level 4-cylinder Lotus in 2014 - 134 bhp.

Who else is trying to sell cars with LESS power than 30 years ago?

Power to weight ratio in 1984, 136bhp per ton.

Power to weight ratio in 2014, 152bhp per ton.

[kambites]

Ozzie Osmond said:

Amongst the oddities is that Evora's platform was supposed to be very flexible and adaptable, allowing use for front or mid-engine applications. Yet it's never been flexed or adapted - presumably because it's too expensive a starting point unless you can sell cars built on it for £60,000 or more. It really is a great shame.

Indeed, but the suggestion was to use the Elise tub.

I don't think a VVA based car is going to sell profitably for 20k.

[saaby93]

otolith said:

SidewaysSi said:

I think that Lotus could do the following:

1. Base car, higher volume, aimed at the MX5 but better driving. Priced around £18-25k. Maybe using the Elise tub but with proper doors and accessability.

Trouble is, I think if they could make a profit selling Elise based cars for 18k they wouldn't be in the mess they are in!

unless a previous poster had it wrong it's not the car side that's giving grief - they have a backlog of orders. It's the R&D side

[otolith]

saaby93 said:

unless a previous poster had it wrong it's not the car side that's giving grief - they have a backlog of orders. It's the R&D side

I think that's right, but as usual the discussion has moved on to "what should Lotus cars do".

[DonkeyApple]

MJK 24 said:

Ozzie Osmond said:

otolith said:

Recent Elises have got too heavy,

134 bhp is where the problem lies - a truly miniscule power output for any £28,000 car today, let alone a sportscar. Base car comparison,

Elise - 134 hp - £28,200 - 876 Kg

Boxster - 265 hp - £38,800 - 1,310 Kg

i.e

• One third more money, gets you
• Double the power, with only
• 50% more weight

Most ridiculous post ever on Pistonheads?!

Why compare cars with such a huge difference in price?

How does a £28k Boxster stack up against the base Elise? Oh, it doesn't as they don't make a model at the price point. Lotus do however make a supercharged Elise at £36,500 which has a power to weight ratio of about 255bhp per ton which is far superior to that of the Boxster above. The residual values of the Lotus can only be dreamt of by the Porsche buyer. I may be wrong but do Porsche still offer just a two year warranty compared to the industry standard of 3 years?

I don't think it is a ridiculous post. It raises the very pertinent question as to why people can find the deposit for an entry level Porsche but not for a Lotus.

Branding will play a part but the two cars are manifestly different. The Boxster is a car that can easily be someone's only car. It drives like any other mass produced car, can be left on the street and is just immensely easy to use and live with. It doesn't require any form of significant compromise.

The Lotus on the other hand instantly removes a large number of potential buyers by not having an electric roof and by not being easy to get in and out of.

It is a much more niche product that appeals to a far smaller demographic. It doesn't really matter how much better it is on the open road or that it doesn't need a big headline BHP figure it is just a style of car that only appeals to a small group.

I suspect it has more in common with cars like a Caterham than a generic, multinational sports car.

That isn't a bad thing at all. The world is clearly a better place for Lotus' but it's not a business that could ever sell anywhere near as many sports cars as the mass producers can with all their gizmos and irrelevant luxuries.

[crofty1984]

SeanyD said:

How about a small engine eco friendly mass produced car, Elise chassis and bodywork, but introduce the Proton production line to bring the cost right down. A beautiful, desirable, insurable and economic car. Bringing some much needed sales and revenue.

... Leaving Hethel to hand make the high performance models at a marginal profit/loss.

Like the Lotus Citycar concept from the Bahar era.
Really sorry to hear this. I worked at Lotus Engineering until fairly recently.

[Craikeybaby]

I'm surprised Zenos hasn't been mentioned in this thread, they seem to be doing a lot of the suggestions of what Lotus should be doing. And they're based just over the road from Lotus.

[John145]

The only way Lotus is going to be profitable is to do exactly what every other niche sports car company does. Use their parent OEM's parts bin.

This means using Proton parts which means Lotuss(es/'s??) must be much cheaper and much poorer quality.

What is happening at the moment is a demonstration of why delusions of grandeur result in failure.

[Fryman]

groundhog day. so sad

[DonkeyApple]

John145 said:

The only way Lotus is going to be profitable is to do exactly what every other niche sports car company does. Use their parent OEM's parts bin.

This means using Proton parts which means Lotuss(es/'s??) must be much cheaper and much poorer quality.

What is happening at the moment is a demonstration of why delusions of grandeur result in failure.

What they want to do is use Proton's entire facility to build an entry level model generic model of something like a hatchback to massively increase volume and keep the UK building the sports cars in the low volumes that all sportscars can ever be.

Or restructure to the size of firms such as Caterham.

I think delusions of grandeur is a bit harsh as Lotus has the brand to easily carry off exclusive sportscars as they currently build but are structured completely wrong for that at present.

Either shrink to fit the market or grow by being in ine of the mainstream groups.

[vernz]

In some ways I think being owned by Proton is part of the problem.

Imagine if they were owned by say the Kia/Hyundai group.

1) Ever increasing profile in the car world
2) Real financial backing
3) Huge group buying power
4) Access to modern and up to date manufacturing plants/methods
5) Ready available group V6 (from Genesis model)
6) Five or seven year warranty.

Get rid of the rear seats, move the engine actually into the middle, create a decent rear boot, redesign the front end and create another small boot, add another 20bhp and sell at 50k with all the normal 'extras' thrown in and then slap a 5 year warranty on it...simples!

[Mark Benson]

DonkeyApple said:

What they want to do is use Proton's entire facility to build an entry level model generic model of something like a hatchback to massively increase volume and keep the UK building the sports cars in the low volumes that all sportscars can ever be.

Or restructure to the size of firms such as Caterham.

I think delusions of grandeur is a bit harsh as Lotus has the brand to easily carry off exclusive sportscars as they currently build but are structured completely wrong for that at present.

Either shrink to fit the market or grow by being in ine of the mainstream groups.

Sadly I think what most people are missing is the levels of debt Lotus are working under, meaning that the above really is the only way for them to recover.

If they could take a Proton Savvy (yes, I've just looked at the Proton website as I had no idea what they manufactured), stick the firm's 111bhp 1.6 engine in there, sort the handling and get the stylists to work, they could have an entry level hatchback for less than £15k (the base Savvy costs under £8k in the showrooms) - get the 20-somethings with a bit of disposable out of their financed Minis and Fiestas and into a Lotus product.
Do the same with the Neo and add a turbo/supercharger and you could have the 21st Century Impreza - those of us with family can get back in a Lotus without having to shoehorn the kids into an Evora.

Lotus Protons might not set the purist pulse racing, but the parent firm has the facilities and the incentive to try and make something like that work.

[The Wookie]

IMHO, having worked there, their problem as a company is that they have far too much management for the number of engineers they have. Being brutal, if these redundancies address the issue then the company will definitely benefit.

Their problem as a car company is that they aim directly at Porsche et al when they don't have the brand or the reputation to compete head on. I love my Evora, I think it's very pretty, it's great to drive, completely positive reception wherever I go (more people know exactly what it is than you might think), and I've covered a total of 65k between the two I've had with only one significant fault.

That said, it's a pain to get in and out of, some of the quality is a bit flakey and it does need a fair bit of fettling at each service to get rid of rattles and make sure everything is up to scratch. Fine in warranty, fine with an enthusiast buyer, but not good enough to be a head on Porsche rival.

If they had the development budget they could build a 500bhp longitudinal V6 car under the Paris Elan Concept body for a fractional increase in the BOM for the Evora and sell it for 80k. At the same cost as a basic 991 Carrera but with Turbo performance and Ferrari levels of visual impact, I think it would have much wider appeal. After all the formula of style and performance at a price that undercut the usual suspects worked well for TVR (with virtually no brand at the time) in the glory days until they wrecked their BOM with an in house engine.

[NickGibbs]

wemorgan said:

IMHO Lotus should have beaten Alfa to the 4C by several years. Even the 2015 MX5 is similar weight to the Elise. As time passes on the difference between Lotus and its competitors has become less and less. Lotus need to reinforce their USPs - lightweight, performance, value. With that there should be a viable business for a 2000/yr OEM.

Bang on

[The Wookie]

NickGibbs said:

wemorgan said:

IMHO Lotus should have beaten Alfa to the 4C by several years. Even the 2015 MX5 is similar weight to the Elise. As time passes on the difference between Lotus and its competitors has become less and less. Lotus need to reinforce their USPs - lightweight, performance, value. With that there should be a viable business for a 2000/yr OEM.

Bang on

The 4C hasn't exactly been a roaring success so far... Only 670 sold in Europe so far despite a massive publicity and marketing campaign.

http://left-lane.com/european-car-sales-data/alfa-...

It's got exactly the same problem, the poke to price ratio is too much for the badge to pull off.

[blueg33]

I see the sad day coming, when Porsche are the only manufacturer with anything like a proper sports car in the £35-55k sector because volumes are so low that it doesnt work for most manufacturers

[k-ink]

The Wookie said:

IMHO, having worked there, their problem as a company is that they have far too much management for the number of engineers they have. Being brutal, if these redundancies address the issue then the company will definitely benefit.

How often do managers cull their own? Isn't it usually the real workers who end up paying the price? In my limited experience I've noticed a few companies which are top heavy. Their answer is always to thin out the real workers and leave the talkers alone.

[iloveboost]

Mark Benson said:

Sadly I think what most people are missing is the levels of debt Lotus are working under, meaning that the above really is the only way for them to recover.

If they could take a Proton Savvy (yes, I've just looked at the Proton website as I had no idea what they manufactured), stick the firm's 111bhp 1.6 engine in there, sort the handling and get the stylists to work, they could have an entry level hatchback for less than £15k (the base Savvy costs under £8k in the showrooms) - get the 20-somethings with a bit of disposable out of their financed Minis and Fiestas and into a Lotus product.
Do the same with the Neo and add a turbo/supercharger and you could have the 21st Century Impreza - those of us with family can get back in a Lotus without having to shoehorn the kids into an Evora.

Lotus Protons might not set the purist pulse racing, but the parent firm has the facilities and the incentive to try and make something like that work.

I agree that this kind of thing is a likely part of Protons plan, but they can't let Lotus become the next MG.
It's dodgy territory trying to make an established 'premium' brand a tuning company for a budget manufacturer. If Proton want to become a mainstream car manufacturer I think the Lotus 'halo' could help, and it will add appeal over an equivalent Kia/Hyundai/Skoda. They just need to be different enough to other models that they don't feel like a trim level otherwise it will quickly reduce the appeal. More Renaultsport Clio, and less Satria Gti.

I think Proton are slowly making Lotus just a brand, but continuing production for now. In a few years maybe there will be a new Elan released as a Proton/Lotus jointly developed car (like the Kia/Lotus Elan) and some Lotus Sayy, etc top spec performance models like you suggest. I guess Proton is trying to reduce Lotus to just what is making money, and what will make money. They won't sell them as the brand is so valuable. 'Lotus' is a great brand, and it could be Protons ticket to become like 'Mini' if they play their cards right.

Of course I could be massively jumping the gun here.

[DonkeyApple]

Mark Benson said:

DonkeyApple said:

What they want to do is use Proton's entire facility to build an entry level model generic model of something like a hatchback to massively increase volume and keep the UK building the sports cars in the low volumes that all sportscars can ever be.

Or restructure to the size of firms such as Caterham.

I think delusions of grandeur is a bit harsh as Lotus has the brand to easily carry off exclusive sportscars as they currently build but are structured completely wrong for that at present.

Either shrink to fit the market or grow by being in ine of the mainstream groups.

Sadly I think what most people are missing is the levels of debt Lotus are working under, meaning that the above really is the only way for them to recover.

If they could take a Proton Savvy (yes, I've just looked at the Proton website as I had no idea what they manufactured), stick the firm's 111bhp 1.6 engine in there, sort the handling and get the stylists to work, they could have an entry level hatchback for less than £15k (the base Savvy costs under £8k in the showrooms) - get the 20-somethings with a bit of disposable out of their financed Minis and Fiestas and into a Lotus product.
Do the same with the Neo and add a turbo/supercharger and you could have the 21st Century Impreza - those of us with family can get back in a Lotus without having to shoehorn the kids into an Evora.

Lotus Protons might not set the purist pulse racing, but the parent firm has the facilities and the incentive to try and make something like that work.

I think the fact that people are trying to compare them to firms which have a few million of operating debt and a few dozen employees highlights the misunderstanding. Lotus employs over 1,000 people and has hundreds of millions of debt. It is a huge company that builds hardly any product and that product has much smaller margins than their rivals.

At the same time, you look at the annual prod vols of most multinational sports car builders and it is under 10,000 units. A few can breach this such as Porsche but the fact remains that even if Lotus tripled annual vols from 3000 to an amazing 10,000 and managed to miraculously increase margins they still won't be selling enough units to cover their running costs.

There simply isn't enough global demand for premium sportscars for the current Lotus Cars model to ever be able to finance its debt and pay its staff and location costs let alone pay down debt and grow.

They need to do something pretty major to generate sufficient sales to justify their current structure and it simply cannot be done by just selling specialist, premium sports cars alone. Someone will pull the pin on them.

[Nohedes]

It seems like the restructuring is in the engineering side of the business, so hopefully the car business will be ok with current volumes. Does anyone know if the engineering profits were being used to support other business activities in recent years?

It seems to me that Lotus only have two options:

1) Make cars that more people want to buy, use scale to make the business sustainable and more profitable.

or

2) Make sure the business is profitable with current volumes (and have a good plan for maintaining volumes over the next 5-10 years)

Personally I think option 2 is their best shot. Either way I wish them luck - a world without Lotus would be a poorer place.