RE: Lotus boss Jean-Marc Gales: PH Meets

RE: Lotus boss Jean-Marc Gales: PH Meets

Friday 26th September 2014

Lotus boss Jean-Marc Gales: PH Meets

Amid yet more turbulence the new head man at Lotus tells PH how he plans to turn things round



The future of Lotus is a subject very close to the hearts of many PHers but recent news out of the old American bomber base at Hethel has been downheartening to say the least.

Gales has proper industry CV
Gales has proper industry CV
In the latest bombshell, the company last week said it would have to shed up to a quarter of its 1,215-strong workforce in a bid to cut costs. Clearly it was time to find out what was going on, so we arranged an interview with the new CEO, Jean-Marc Gales, to hear how bad things really were. We know from the most recent company reports that Lotus Cars and the attached Lotus Engineering consultancy lost £159 million in the year to the end of March 2013 and £115 million in the year before that. Bleeding cash basically.

So Gales (pronounced Ga-les) had his work cut from the moment he started in May, but if anyone can sort out the mess then this guy can. Compared with former CEO Dany Bahar's narrow marketing background, Luxembourg-born Gales has the complete auto-exec CV, ranging from engineering roles to heavyweight jobs such as head of global sales for Mercedes and head of brands for PSA Peugeot Citroen.

During our 40-minute interview he (mostly) didn't beat about the bush. "The fact is we need to reduce our costs and we need to sell more cars," he tells PH. Those cars in the medium term to continue to be current Elise, Exige and Evora or variants of them. Forget Bahar's very pretty array of concepts, they're toast. Even the Esprit.

"Nothing survived from them," he says. Quite apart from the cost of developing them for production, they didn't fit with the Lotus ethos. "If you look at [the core Lotus values of] dynamic excellence and lightweight efficiency, this clearly excludes the five former concepts that we showed four years ago in Paris."

Gales has experience at PSA and Mercedes
Gales has experience at PSA and Mercedes
That includes the promised V8 engine. "If you look our size, our structure, our past, we are not a company that can afford to build our own engines," he says. Instead, he says Lotus will continue to modify Toyota engines, just as Colin Chapman modified the Ford unit to create the twin-cam engine used many early Lotus cars.

Gales referred to Colin Chapman a lot in the interview, which bodes well. Gales and his management team analysed what made a Lotus a Lotus, and quickly figured out that Chapman's formula is still highly relevant today. "We decided it's the purity of Lotus that is the most important thing. It is what you feel when you get into the Exige. That's when we decided to got back to the old Chapman philosophy that lighter and simpler is better. All our new products will reflect this," he says. And yes, he can envisage making something besides sports cars in the future. "These values can attached to any segment you can imagine."

Except right now he can't afford to build anything brand new. We all might argue that a range built on a bonded aluminium platform that can trace its roots back to the Elise's launch in 1996 is outmoded, but he strongly and persuasively argues that the three cars are still highly relevant today. "The current range have clearly got a lot of life left in them," he says.

Further developments of Evora promised
Further developments of Evora promised
The three are still the dynamic benchmark in their segments (feel free to argue), but Gales believes that the method of construction with everything attached to the central 'tub' is still bang up to date, even compared to carbon fibre versions. "Our tub on the Elise weighs 68kg. The carbon fibre tub on the Alfa 4C weighs 65kg. In the 17 years since Elise was launched, they've only saved three kilos."

He will continue to improve the current cars, promising model enhancements to make them lighter, faster, more dynamic and more economical. He reckons the tub can be altered to make them easier to climb in and out of, and he's looking at rolling out a "comfort pack" to make the Elise and Exige more useable day-to-day, should the buyer want it.

And he's also addressing the lack of dealers, which he reckons was a big reason why sales have been so sluggish. "More dealers drive more sales. Our sales network basically did not provide enough coverage for our sales ambition. It's absolutely not the question of our product," he says. He reels out a whole list of European cities without a dealer, a list topped by London. By the March next year, he says he'll add up to 20 more.

Evora could follow Exige with a Roadster
Evora could follow Exige with a Roadster
Something must be working because sales are up. In the five months from the end for March, Lotus has sold 914 cars globally, meaning they're on course to beat the 1,232 total last year.

Amazingly he says the current best-seller is not the Elise, which starts at £30,900, but the ballsy 3.5-litre V6 Exige, a whole more expensive at £54,500. "It's the car that embodies most the DNA of Lotus," Gales says.

There will be new cars, but built on the current platform in the medium term. Expect an announcement within the next nine months. "They will shared with underpinnings with current cars, but they will drive like nothing else," he says. One possibility is an Evora convertible. "A convertible will certainly appeal to many buyers in the US. It would be lovely to have one and it is relatively easy to do - the roof is not a structural part," he says.

On that point, contrary to a recent story, Lotus is not pulling out of the US. It says it will not build a 2015 model year Evora while it works on a compliant car for 2016 with the right airbags.

Elise tub only 3kg heavier than Alfa 4C's; it's staying
Elise tub only 3kg heavier than Alfa 4C's; it's staying
We were impressed with Gales. As he should given his experience, he seems to have grasped what needed to be done and had the gumption to make the tough decisions for the good of the company.

It seems unfair he lacks the cash that Dany Bahar had, because we get the impression he'd have spent it wisely and true to Chapman's ethos. But just to deliver the company back to profitability, something he reckons can be done "in the very foreseeable future", would be enough to earn the praise of Lotus fans everywhere, certainly round these parts. Then he can build the next Elan and Esprit. We couldn't get a promise on that, but we liked this statement: "In the future, lets look into our heritage, because our heritage will define our future. We will go back to what makes Lotus great, building iconic sports cars."

Author
Discussion

MyCC

Original Poster:

337 posts

156 months

Friday 26th September 2014
quotequote all
Such a shame that there will not be a new Esprit, that car is surely very much in Lotus' DNA. Understand about the costs involved to build it though, but if they begged and borrowed as much as they could from Toyota, could it not be possible?

Regards,

MyCC.

Ozzie Osmond

21,189 posts

245 months

Friday 26th September 2014
quotequote all
"The fact is we need to sell more cars."

Exactly.

kambites

67,463 posts

220 months

Friday 26th September 2014
quotequote all
Sounds like exactly the person Lotus needs. Whether it will be enough, remains to be seen.

Ryvita

712 posts

209 months

Friday 26th September 2014
quotequote all
Sell more cars.
Cut costs.
Better dealer network.
Convertible Evora.
Maintain DNA of lightness and simplicity.

Well it's certainly everything that everyone's been saying for ages, but it's not a simple task and he actually needs to go do it. A lot of people are cheering him on certainly, and he has the experience and clout by the sounds of it. Fingers crossed.

Unsurprised to hear that the Exige is now leading the way. It's an amazing thing and I want one.

EDIT: Oh, typo on the picture caption conflicting with the article text re. Exige/Evora leading sales? - Fixed now. smile


Edited by Ryvita on Friday 26th September 11:55

sad61t

1,100 posts

209 months

Friday 26th September 2014
quotequote all
Regarding the dealer network he's 100% correct - the paucity of dealers rules out a Lotus for me. The nearest one pre-Bahar was 10 minutes away and very approachable sales people; I could have walked back from dropping it off for a service. Now the nearest is a 90-minute drive and combined with a 5.5 day working week, visiting on the off-chance I see something I like is minimal. As for servicing, forget it.

Ozzie Osmond

21,189 posts

245 months

Friday 26th September 2014
quotequote all
Ryvita said:
Unsurprised to hear that the Exige is now leading the way. It's an amazing thing.
Agreed. And if as mentioned in the interview they can sort out the mahoosive sills on that old aluminium tub then they'll have a much better chance of selling more cars. Also needs some way to carry the roof when it's removed. These things matter.

kambites

67,463 posts

220 months

Friday 26th September 2014
quotequote all
Ozzie Osmond said:
Also needs some way to carry the roof when it's removed. These things matter.
Does it not fit in the boot and/or behind the seats?

LotusOmega375D

7,582 posts

152 months

Friday 26th September 2014
quotequote all
The Exige figures are so healthy due to track day customers (particularly the companies who run these events).

As for the report: did anyone at PH proof-read it before posting? It's practically gibberish in parts. Also very similar to recent Daily Telegraph interview.

Impasse

15,099 posts

240 months

Friday 26th September 2014
quotequote all
The Bahar Esprit was close to prototype stage. The engine was already whizzing around the roads of Norfolk in the back of at least one mule. What a waste of money to bin it all. Lotus began making their own engines in the mid 70s, how that can not be seen as part of their much reported core values is a mystery.

405dogvan

5,326 posts

264 months

Friday 26th September 2014
quotequote all
The Evora is their best seller? I've seen - errr - 2 of those, ever! For that reason alone I quite desire one. I like the less-fussy interior, I like the exterior if the alloys/paint are done right, they also have room for a dog AND steer well?? ;0 Over £60k tho is - well - I'd be scared to put that much into one. Not that it wouldn't resell - eventually...

I've not actually seen a 'current model' Elise - the one with the 'Cars Movie' front end - and it's been around for over 2 years now?

I've seen one of the newer-look Exiges - the dealer demo - and kinda wished I hadn't. The front/rear restyle is - how can I say it - an acquired taste!?

I know, I know, it's the drive not the looks and toys - I'm with you - but no-one seems to be driving them and I don't see how you change that?

anonymous-user

53 months

Friday 26th September 2014
quotequote all
ph_article said:
Amazingly he says the current best-seller is not the Elise, which starts at £30,900, but the ballsy 3.5-litre V6 Exige, a whole more expensive at £54,500. "It's the car that embodies most the DNA of Lotus," Gales says.
I don't find it amazing that the cheaper elise, which sits right in the £30k to £35k "hotbed" of competition sells less than the vastly more expensive, but much more unique in its sector Exige!

Lets face it, for someone who wants something sporting for say £35k, the world is your oyster, for every Elise, there's gonna be a hundred other options. Wind up to say £50k, and those other options are much more widely spread, it's not enough for a "proper" Porsche, too little for the really bonkers track toys (mono, Atom etc) so i'm unsurprised the Exige sells more tbh!

I've said it before, but, for the elise to survive as a relatively low powered car i think it's got to go "Eco", ie mild hybrid etc. Lotus are well aligned to take a chunk of that pie that currently the mainstream OEMs are too big and unwieldy to grab!

John145

2,447 posts

155 months

Friday 26th September 2014
quotequote all








There's the real Lotus DNA.

phil4

1,203 posts

237 months

Friday 26th September 2014
quotequote all
Max_Torque said:
Wind up to say £50k,
...
Max_Torque said:
too little for the really bonkers track toys (mono, Atom etc)
Really, I just bought an Atom, new, and it was less than £50K. I mean sure, it's not a 3.5R or V8, but its still plenty rapid, and bonkers.

bishbash

2,447 posts

196 months

Friday 26th September 2014
quotequote all
405dogvan said:
The Evora is their best seller?
It says in the article it's the Exige, but in your defense it does say Evora in the picture captions.

smilo996

2,755 posts

169 months

Friday 26th September 2014
quotequote all
Certainly sounds focused. Though agree that the Esprit was firstly in line with Chapman's values but also put Lotus on every boys bedroom wall.
Not to make another would be foolish.

When they put a sunroof in the Evora they might consider redesigning it so it looks less odd.

If he is as foceful as he appears why the lack of money yet again? Clearly the very wealthy parent company cannot see that much potential in new investment. If Bahr and this bloke were running Lotus then I think they would really go places.

We live in hope.

Prawnboy

1,326 posts

146 months

Friday 26th September 2014
quotequote all
will be interesting to see an Evora drop top, i found a mock up on line and it looks awesome.


sounds like a sensible guy, i think they need to try and push the lotus name onto other products, if they could hook up with car manufacturers that could use an image boost, a modern day sunbeam, cortina or carlton would help cement there name in the public imagination again.

a Lotus Velestor?
a Lotus Cee'd?




TVRinBFG

1,457 posts

283 months

Friday 26th September 2014
quotequote all
An interesting article. It would be great to know how much Lotus Cars loses and how much Lotus Engineering Consultancy does?

Hedgerley

620 posts

267 months

Friday 26th September 2014
quotequote all
I think the general opinion of JMG is that he 'gets' Lotus and although the Lotus community has been critical of the lack of (visible) progress what we are now hearing is very encouraging. Its also worth noting that DRB_Hicom are starting to do very well and they are generating cash (Q1/15 revenue up 22%, profit before tax up 93% on Q4/14, mainly due to improvements in the Automotive Sector) If JMG can show good, solid short term progress (sales are forecast to be around 2,400 this year, which is excellent) then who knows, his bosses may start to loosen the purse strings in a year or two.

I mailed JMG the week he was appointed to congratulate him and express our hopes for the future. Didn't expect a reply but got a thank you note 20 mins later and a promise to stay in touch. I've exchanged a few more since and boy, does he get Lotus and the fan base. Can't say that of too many CEO's in the past (except CC and MJK of course)

BTW, I recall an EVO visit to Hetehl in the DB era. I'm sure Harry Metcalfe mentioned seeing a topless Evora. He certainly mentioned an Esprit Spider which was a 'wallet busting moment' for him there and then. A real shame it was canned.



Edited by Hedgerley on Friday 26th September 12:22

mrdemon

21,146 posts

264 months

Friday 26th September 2014
quotequote all
"The three are still the dynamic benchmark in their segments "

he is dreaming.

the 1st issue in his role should be seeing the down sides of the cars he is trying to sell in todays market, not saying how great they are.

the Evora a benchmark ffs. it's a dinosaur and all he wants to do is cut the roof off.

the cars needs a new engine, needs to loose 100kg's and be 15k cheaper.

in 2014 they have sold 10 sports racers !!!!

cars will sell, you don't need dealers.

UK sales must be an all time low now.

Dave Hedgehog

14,541 posts

203 months

Friday 26th September 2014
quotequote all
so he is going to slavishly follow the rehash the existing model philosophy thats brought lotus to the edge of bankruptcy

superb logic


and what's this nonsense about V8's, why not just use the one toyota use in the RC F??? the toyota V6 is good enough after all