Lotus:- The End?
Discussion
C1RVY said:
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The new Exige, if they can get them out the door, would be enough to turn the thing around. It's just what the motoring world wants.
If it was, they wouldn't be in the trouble they're in right now.The new Exige, if they can get them out the door, would be enough to turn the thing around. It's just what the motoring world wants.
The market for impractical plastic sportscars is very, very small. The Japanese and Germans make sensible sportscars for the overwhelming majority.
LaurasOtherHalf said:
The only thing left not to pay us the staff, and from my experience that is exactly what will happen next.
I sure hope it doesn't & not just for the staffs sake, but they're following the well trodden path of thousands upon thousands of businesses that have gone bust.
Believe me I certainly don't want that to happen, even if for the purely selfish reason that I really want a lotus as my imminent next car, but it really doesn't look good.
I truly hope that Lotus do survive and you the staff get paid, we can do without another manufacturing company closing, and its not something the staff deserve. I sure hope it doesn't & not just for the staffs sake, but they're following the well trodden path of thousands upon thousands of businesses that have gone bust.
Believe me I certainly don't want that to happen, even if for the purely selfish reason that I really want a lotus as my imminent next car, but it really doesn't look good.
From what I can see they are in a downward spiral, they have huge overheads (mostly staff) to pay each month, suppliers won't release orders without being paid, even when (if) the overdue invoices are paid they will probably be on proforma terms with suppliers. If suppliers won't release components they can't make cars, so sales will fall still further, but employees and other bills still need to be paid.
Unless they get a big injection of cash they're going the same way as TVR, unfortunately.
Unless they get a big injection of cash they're going the same way as TVR, unfortunately.
QUICK SURVEY of the comments thus far show that 65% of you are 'glass half empty'. Out of that 65% I wonder how many of you are true Lotus owners? Owning a Lotus is a true privalege, all those that have one, or have had one or two or three or more, will yearn for the next natural development of the Mark with a car which will deliver best handling and ride performance at a fraction of the development costs of it's peers... So come on you Lotus community out there, just get behind Lotus and look forward to what Lotus does best!
They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
Tonyringtone said:
They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
I hope they do. I had an Elise for 4 years and am currently looking to buy an Evora 2nd hand.But those numbers a few posts up are scary.
Tonyringtone said:
QUICK SURVEY of the comments thus far show that 65% of you are 'glass half empty'. Out of that 65% I wonder how many of you are true Lotus owners? Owning a Lotus is a true privalege, all those that have one, or have had one or two or three or more, will yearn for the next natural development of the Mark with a car which will deliver best handling and ride performance at a fraction of the development costs of it's peers... So come on you Lotus community out there, just get behind Lotus and look forward to what Lotus does best!
They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
I admire your spirit & enthusiasm in the marque ( They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
) tony but a group of enthusiasts living in the dark preaching to the unconverted isn't going to do much good is it?I may be considered to be one of the "glass half full" posters but as an ex-lotus owner & as someone who is currently in the process of trying to do a deal on a current model I deal my comments are valid.
Simply put, you're right in that lotus owners tend to be car enthusiasts. But car enthusiasts tend to read car forums & do a lot of research on their automotive purchases & to those that do things aren't looking good.
I stand by my post above, lotus are at the far end of the walking plank as far as businesses go.
If they're saved & continue to trade they'll be getting a huge chunk of my money, after reading that last newspaper article I'll be holding steady to see what happens.
One minor point to those looking at things through their lotus enthusiasts rise tinted glasses, spare a thought for the companies who are owed huge amounts of money by the lotus group & who are more than likely making huge sacrifices to cover lotus' losses.
Hey Laura, thanks for your view, can't argue with your comments, other than lotus has always been on the edge of survival in all my 37 years of ownership of the Mark. Hasn't put me off, in fact it's made me even more determined over the years to do my bit by investing in the company. Well spotted, I am a dedicated enthusiast, it's a great feeling being so passionate about the breed and i still own three of them.
As far as the supply chain is concerned, Colin Chapman set the president! All those years ago, in the early days people used to work for him for nothing but for the sheer thrill of being involved and part of it. Not suggesting this should be the case in the 21st Century material age that we all now live in, but something other than money alone has kept this rollercoaster going.
As far as the supply chain is concerned, Colin Chapman set the president! All those years ago, in the early days people used to work for him for nothing but for the sheer thrill of being involved and part of it. Not suggesting this should be the case in the 21st Century material age that we all now live in, but something other than money alone has kept this rollercoaster going.
RYH64E said:
Look at the numbers:
Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
The situation looks bad but I do not think DRB would Lotus go bankrupt . First the 200m are guaranteed by Proton not by Lotus. If Lotus fails they never can pay something back. If true DRB are quite rich at least the owner is. Lotus/Proton gave the F1 team a loan of 36m. Lots of money is already invested in the factory new developments etc. In the automotive world 30m debt is peanuts. So either DRB will solve the problem or sell Lotus for a small fee ( they cannot sell now but from next year february ) to someone else. I would be surprised if nobody want to buy it certainly when Audi bought Ducati for 1.2b which included a debt of 800m. Ducati or Lotus I know which one I would like to own.Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
Also do not rule out politics Malaysia and the UK this is also a bit sensitive. I could be wrong but I hope not.
Edited by Gabber on Tuesday 9th October 22:38
- Lotus always survive best on the edge and they then produce the joker...
s off you scouse turdHeart and soul is what Lotus is about, yes I am biased but heck in this modern world I would rather have and indeed do have a Lotus rather than a sanitised perfect blob, clearly they do have revenue and overheads challenges but what company doesn't, hopefully the overheads can be contained and the current management team bring the company back from the brink, it is not an enviable task.
One owners write up http://www.pistonheads.com/news/26196.htm we need lotus in this insane world. The passion skill and dedication of the people who work at Lotus is legendary. No if's no but's lets hope survival of the company happens.
One owners write up http://www.pistonheads.com/news/26196.htm we need lotus in this insane world. The passion skill and dedication of the people who work at Lotus is legendary. No if's no but's lets hope survival of the company happens.
Edited by Toaster on Wednesday 10th October 08:53
Gabber said:
RYH64E said:
Look at the numbers:
Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
The situation looks bad but I do not think DRB would Lotus go bankrupt . First the 200m are guaranteed by Proton not by Lotus. If Lotus fails they never can pay something back. If true DRB are quite rich at least the owner is. Lotus/Proton gave the F1 team a loan of 36m. Lots of money is already invested in the factory new developments etc. In the automotive world 30m debt is peanuts. So either DRB will solve the problem or sell Lotus for a small fee ( they cannot sell now but from next year february ) to someone else. I would be surprised if nobody want to buy it certainly when Audi bought Ducati for 1.2b which included a debt of 800m. Ducati or Lotus I know which one I would like to own.Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
Also do not rule out politics Malaysia and the UK this is also a bit sensitive. I could be wrong but I hope not.
From a business point of view I'm much less of a fan. Sales less cost of sales = gross profit, gross profit less overheads = nett profit.
Gross profit on a turnover of £45m = 45-33 = £12m
So to break even they either need to get overheads down from £35m to £12m or get GP up to £35m by tripling the sales figure and maintaining overheads at the same level. Neither of these scenarios are very likely to happen.
Then you've got the debt situation. A new owner would be expected to take on the debt, (£230m?) and then try to make a profit by either cutting overheads or massively increasing sales. You'd have to be totally mad to take on Lotus.
In the short term, you have to pay suppliers up to date and pay for new orders on proforma if you want to get parts to build new cars. The suppliers are likely to be very angry, I know I would be, and rather uncooperative.
What happens next will depend on who holds the debt, what security has been given and by who, but if they can close it down and leave the debt with the banks and suppliers then that is the logical choice.
T'was ever thus:
http://www.pistonheads.com/lotus/default.asp?story...
£42 millon pound loss, new car delays, doom on the forums, and all from eleven years ago.
http://www.pistonheads.com/lotus/default.asp?story...
£42 millon pound loss, new car delays, doom on the forums, and all from eleven years ago.
RYH64E said:
...
So to break even they either need to get overheads down from £35m to £12m or get GP up to £35m by tripling the sales figure and maintaining overheads at the same level. Neither of these scenarios are very likely to happen.
I'd disagree there. From their current position, tripling their sales figure is relatively achievable. Remember that due to the (four month?) shut down at the beginning of the year, the delay completing the Exige development and the current cash flow issues, they've hardly built any cars this year. Sales are pitiful because they just haven't put any metal on the road. Tripling sales of a handful of cars is far easier than tripling sales of thousands.So to break even they either need to get overheads down from £35m to £12m or get GP up to £35m by tripling the sales figure and maintaining overheads at the same level. Neither of these scenarios are very likely to happen.
The bigger issue is why they are having cash flow issues right now. DRB are meant to be the wealthy new owners, yet they seem to be unable or unwilling to support basic operation of the business. That's particularly worrying when Lotus are meant to be the minnow they accidentally caught when they landed Proton.
There have to be a few questions about the due diligence during the takeover, the intents of the new owners or the management by Proton. At least one of those three seems to be at odds with the public façade.
Tonyringtone said:
QUICK SURVEY of the comments thus far show that 65% of you are 'glass half empty'. Out of that 65% I wonder how many of you are true Lotus owners? Owning a Lotus is a true privalege, all those that have one, or have had one or two or three or more, will yearn for the next natural development of the Mark with a car which will deliver best handling and ride performance at a fraction of the development costs of it's peers... So come on you Lotus community out there, just get behind Lotus and look forward to what Lotus does best!
They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
[yawn]They have to survive don't they! Otherwise what would all you '65%ters' have to talk about? you would clearly have a lot of time on your hands!
RYH64E said:
Gabber said:
RYH64E said:
Look at the numbers:
Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
The situation looks bad but I do not think DRB would Lotus go bankrupt . First the 200m are guaranteed by Proton not by Lotus. If Lotus fails they never can pay something back. If true DRB are quite rich at least the owner is. Lotus/Proton gave the F1 team a loan of 36m. Lots of money is already invested in the factory new developments etc. In the automotive world 30m debt is peanuts. So either DRB will solve the problem or sell Lotus for a small fee ( they cannot sell now but from next year february ) to someone else. I would be surprised if nobody want to buy it certainly when Audi bought Ducati for 1.2b which included a debt of 800m. Ducati or Lotus I know which one I would like to own.Turnover £45m
Overheads £35m
Cost of sales £33m
Overdue suppliers, 30 days+ £30m
Outstanding loans £200m ?
Taking away the sentiment, that's only going one way I'm afraid
Also do not rule out politics Malaysia and the UK this is also a bit sensitive. I could be wrong but I hope not.
From a business point of view I'm much less of a fan. Sales less cost of sales = gross profit, gross profit less overheads = nett profit.
Gross profit on a turnover of £45m = 45-33 = £12m
So to break even they either need to get overheads down from £35m to £12m or get GP up to £35m by tripling the sales figure and maintaining overheads at the same level. Neither of these scenarios are very likely to happen.
Then you've got the debt situation. A new owner would be expected to take on the debt, (£230m?) and then try to make a profit by either cutting overheads or massively increasing sales. You'd have to be totally mad to take on Lotus.
In the short term, you have to pay suppliers up to date and pay for new orders on proforma if you want to get parts to build new cars. The suppliers are likely to be very angry, I know I would be, and rather uncooperative.
What happens next will depend on who holds the debt, what security has been given and by who, but if they can close it down and leave the debt with the banks and suppliers then that is the logical choice.
Tuna said:
I'd disagree there. From their current position, tripling their sales figure is relatively achievable. Remember that due to the (four month?) shut down at the beginning of the year, the delay completing the Exige development and the current cash flow issues, they've hardly built any cars this year. Sales are pitiful because they just haven't put any metal on the road. Tripling sales of a handful of cars is far easier than tripling sales of thousands.
The bigger issue is why they are having cash flow issues right now. DRB are meant to be the wealthy new owners, yet they seem to be unable or unwilling to support basic operation of the business. That's particularly worrying when Lotus are meant to be the minnow they accidentally caught when they landed Proton.
There have to be a few questions about the due diligence during the takeover, the intents of the new owners or the management by Proton. At least one of those three seems to be at odds with the public façade.
£45m turnover will be roughly 1100 cars @ an average of £40k each, from what I see here http://skiddmark.com/2012/10/is-drb-hicom-fiddling... UK dealer sales are a lot less than that (120 quoted for 2012). So not triple 2012 production, but upping to 3300 cars/year without any increase in overheads.The bigger issue is why they are having cash flow issues right now. DRB are meant to be the wealthy new owners, yet they seem to be unable or unwilling to support basic operation of the business. That's particularly worrying when Lotus are meant to be the minnow they accidentally caught when they landed Proton.
There have to be a few questions about the due diligence during the takeover, the intents of the new owners or the management by Proton. At least one of those three seems to be at odds with the public façade.
The problem at Lotus isn't what is usually understood by 'cashflow', which is usually caused by over expansion increasing supplier bills before slow paying customer cash is received, in this case cashflow means they are spending far more cash than their sales can sustain - making a stonking great loss in other words. And as they would appear not to be paying their suppliers...
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