What's happened at Lotus?
Discussion
Last I heard they were bringing out a whole new range of more upmarket models, had brought in a whole bunch of hot shots from Ferrari/Porsche etc - but in this month's evo Chris Harris makes a throw away comment about "the debacle at Lotus" - has it all gone tits up??
Edited by MikeO996 on Monday 7th March 19:44
As I keep saying, to understand the proposed mmarket position of Lotus you need to understand how their parent company Proton work.
Proton make a huge range of cars, all in the same market, 1600 to 2 Liter family cars, they compete with themselves, (Saga, Savy, Waja, Perdana, Ispira etc). they keep going (dispite huge losses), they see some one else making a profit and they jump into that market (see the Savy which was rushed in to compete with the Peradu Mivi), instead of making one car well and in sufficient volume to make real money, they keep going due to a protected market and government subsidy.
This idea that if some one is making a margin on a product similer to yours then you can jump in and get ashare of that market is very Malaysian and you see it through out Malaysian industry, I spend half my life try to keep people in areas they know and can make money in.
This is exacly wHat they are doing with Lotus, attempting to introduce a range of cars that all compete with each other, but they do not have the money and hopefully the British goverenment will not give them the money to waste, unlike the Malaysian one.
Subject to the British government not paying up, I'll believe the new range of cars when I see them and not before.
Proton make a huge range of cars, all in the same market, 1600 to 2 Liter family cars, they compete with themselves, (Saga, Savy, Waja, Perdana, Ispira etc). they keep going (dispite huge losses), they see some one else making a profit and they jump into that market (see the Savy which was rushed in to compete with the Peradu Mivi), instead of making one car well and in sufficient volume to make real money, they keep going due to a protected market and government subsidy.
This idea that if some one is making a margin on a product similer to yours then you can jump in and get ashare of that market is very Malaysian and you see it through out Malaysian industry, I spend half my life try to keep people in areas they know and can make money in.
This is exacly wHat they are doing with Lotus, attempting to introduce a range of cars that all compete with each other, but they do not have the money and hopefully the British goverenment will not give them the money to waste, unlike the Malaysian one.
Subject to the British government not paying up, I'll believe the new range of cars when I see them and not before.
Berw said:
As I keep saying, to understand the proposed mmarket position of Lotus you need to understand how their parent company Proton work.
Proton make a huge range of cars, all in the same market, 1600 to 2 Liter family cars, they compete with themselves, (Saga, Savy, Waja, Perdana, Ispira etc). they keep going (dispite huge losses), they see some one else making a profit and they jump into that market (see the Savy which was rushed in to compete with the Peradu Mivi), instead of making one car well and in sufficient volume to make real money, they keep going due to a protected market and government subsidy.
This idea that if some one is making a margin on a product similer to yours then you can jump in and get ashare of that market is very Malaysian and you see it through out Malaysian industry, I spend half my life try to keep people in areas they know and can make money in.
This is exacly wHat they are doing with Lotus, attempting to introduce a range of cars that all compete with each other, but they do not have the money and hopefully the British goverenment will not give them the money to waste, unlike the Malaysian one.
Subject to the British government not paying up, I'll believe the new range of cars when I see them and not before.
Isn't that how Rover used to work? And how Peugeot and Citroen work now?Proton make a huge range of cars, all in the same market, 1600 to 2 Liter family cars, they compete with themselves, (Saga, Savy, Waja, Perdana, Ispira etc). they keep going (dispite huge losses), they see some one else making a profit and they jump into that market (see the Savy which was rushed in to compete with the Peradu Mivi), instead of making one car well and in sufficient volume to make real money, they keep going due to a protected market and government subsidy.
This idea that if some one is making a margin on a product similer to yours then you can jump in and get ashare of that market is very Malaysian and you see it through out Malaysian industry, I spend half my life try to keep people in areas they know and can make money in.
This is exacly wHat they are doing with Lotus, attempting to introduce a range of cars that all compete with each other, but they do not have the money and hopefully the British goverenment will not give them the money to waste, unlike the Malaysian one.
Subject to the British government not paying up, I'll believe the new range of cars when I see them and not before.
The way I see it, is Lotus/Proton has accepted that the Elise has come to the end of its lifecycle; they've dragged it out too long really. Lotus Cars has only turned a profit once in the past 5 or 6 years. The engineering side is carrying them.
This change of market position and range of new products is make or break for them. And they're putting the effort into push those changes in other areas: F1, T125, new dealerships, bigger, better stands at motor shows, all changes to alter the customers' perception of the Lotus brand - bringing it in-line with the new products.
Proton has already refinanced Lotus, so they stand to lose a lot if they go bust, I doubt they want that, so they're looking at ways to minimise their costs, as any business would. Asking for grants to keep manufacturing in the UK is not unusual - Nissan and Toyota receive government funding. Lotus could move manufacturing to Malaysia with massively reduced labour costs.
It's good for the UK to keep Lotus here, they are a high tech firm and come up with some innovative designs and employ a lot of people. It would be a great loss to close Hethel. Which, incidentally, Proton has improved/is improving at the moment.
The choice is lose Lotus or help to build it back up to its glory days. I know which I'd choose. (Even if it will eventually lead to profits going to a foreign company!).
Burrite, yes you are right thats exactly what Rover did, compete with themselves and look where it got them, Proton are in serious trouble themselves from this policy, they are losing money hand over fist.
I think maybe the British government should fund Lotus, (and again you are right about Toyota etc getting grants), but the grants shold be for a sustainable development, not for a range of cars that compete against themselve, develope one or two cars that will sell as world cars.
The concept of being 'all things to all men' is common in Malysian business, they try to build profit by volumne there is no concept of added value service or premium prices for quality, even at the level of one man business.
By the way Lotus tried to manufacture in Malaysia they made 100 Elise here, and they never sold had to be dumped on the local market, because the export market would not touch them.
I think the Citron/Peug thing is a bit diffrent thay have a common componet policy so they get economies of scale, Proton don't the Waja runs a diffrent engine from the Mivi for example.
I think maybe the British government should fund Lotus, (and again you are right about Toyota etc getting grants), but the grants shold be for a sustainable development, not for a range of cars that compete against themselve, develope one or two cars that will sell as world cars.
The concept of being 'all things to all men' is common in Malysian business, they try to build profit by volumne there is no concept of added value service or premium prices for quality, even at the level of one man business.
By the way Lotus tried to manufacture in Malaysia they made 100 Elise here, and they never sold had to be dumped on the local market, because the export market would not touch them.
I think the Citron/Peug thing is a bit diffrent thay have a common componet policy so they get economies of scale, Proton don't the Waja runs a diffrent engine from the Mivi for example.
Berw said:
Burrite, yes you are right thats exactly what Rover did, compete with themselves and look where it got them, Proton are in serious trouble themselves from this policy, they are losing money hand over fist.
I think maybe the British government should fund Lotus, (and again you are right about Toyota etc getting grants), but the grants shold be for a sustainable development, not for a range of cars that compete against themselve, develope one or two cars that will sell as world cars.
The concept of being 'all things to all men' is common in Malysian business, they try to build profit by volumne there is no concept of added value service or premium prices for quality, even at the level of one man business.
By the way Lotus tried to manufacture in Malaysia they made 100 Elise here, and they never sold had to be dumped on the local market, because the export market would not touch them.
I think the Citron/Peug thing is a bit diffrent thay have a common componet policy so they get economies of scale, Proton don't the Waja runs a diffrent engine from the Mivi for example.
The trouble is that they have seriously hacked off the loyal Lotus fans with their indecision and dinking about. Lotus dealers are left without a product to sell until these wonder products come out, if ever. I was about to buy a new Exige, but cancelled the order as it really is not clear that Lotus are interested in my custom. I could afford to buy an Evora, but it has lots of strong competitors, it doesn't do what mainstream Lotus cars have always done, and the management doesn't even seem interested in it in any case. I think maybe the British government should fund Lotus, (and again you are right about Toyota etc getting grants), but the grants shold be for a sustainable development, not for a range of cars that compete against themselve, develope one or two cars that will sell as world cars.
The concept of being 'all things to all men' is common in Malysian business, they try to build profit by volumne there is no concept of added value service or premium prices for quality, even at the level of one man business.
By the way Lotus tried to manufacture in Malaysia they made 100 Elise here, and they never sold had to be dumped on the local market, because the export market would not touch them.
I think the Citron/Peug thing is a bit diffrent thay have a common componet policy so they get economies of scale, Proton don't the Waja runs a diffrent engine from the Mivi for example.
I keep hearing how clever this new CEO is at marketing, but in all the time that I have worked with marketeers the golden rules were:
a) Don't alienate you current customers
b) Don't announce new products until you can ship them
What you wrote makes very interesting reading, and also explains why Proton were so easily blown off course. The best thing the government can do is apply a bit of attention to the Lotus product planning and push it back into the realms of reality.
Edited by netherledy on Sunday 27th March 13:34
Neverledy, you understand my point, Proton do not understand Markets, had this conversation with a Malaysian friend this morning. Does not mater how good the MD at Lotus is Proton will stop him. Malaysians just do not undertand customers, that there are premium products, or that customers can walk away.
Its a real pitty because the Proton boys are real keen to do something with Lotus.
Malaysia is an economy where everything sells on price,I've seen people deal with some one for years, get good service, gaurantees, etc and than go to the shop next door because they are a liitle cheaper. That the sort of customer Proton understands one who is driven by price.
Its a real pitty because the Proton boys are real keen to do something with Lotus.
Malaysia is an economy where everything sells on price,I've seen people deal with some one for years, get good service, gaurantees, etc and than go to the shop next door because they are a liitle cheaper. That the sort of customer Proton understands one who is driven by price.
Berw said:
Does not mater how good the MD at Lotus is Proton will stop him.
Danny Kebab is not very good at all, except maybe at sounding out the exact mentality of the Proton business model and pitching to it (with a list of 'new products' that he claims will each take a bite out of a market rival's share).That explains perfectly the "vapourware".
Sorry guys, I missed your previous replies. It's an interesting take on the Malaysian/Proton business culture and something I had never considered.
I still stand by my original statement though. Lotus was making losses before Proton really came on-board. They've refinanced the company and are in the process of repositioning the company as a premium sports car brand, moving it away from the cheaper end of the market. The Elise and it's various iterations and even the Evora have not made Lotus money for some years.
It's a big, big change, but the current model is not working. Looking at what they are doing it's following the textbook marketing strategy.
I still stand by my original statement though. Lotus was making losses before Proton really came on-board. They've refinanced the company and are in the process of repositioning the company as a premium sports car brand, moving it away from the cheaper end of the market. The Elise and it's various iterations and even the Evora have not made Lotus money for some years.
It's a big, big change, but the current model is not working. Looking at what they are doing it's following the textbook marketing strategy.
- Product - new range
- Price - premium price, similar to AM, who they're going head to head with. Aston has been very successful over the last few years - Lotus probably wants a slice of that pie!
- Place - not sure on their markets, but certainly UK dealers have been dropped and are expected to invest a million on their dealership (IIRC) for new contracts
- Promotion - this is where I think Lotus is doing it well. They're really building their PR effort at the moment. The website is improving. They're getting involved in social networking. And the big deal: They're pushing the brand in "big audience" motorsport such as Indycar. Oh, and they're in F1, if you hadn't noticed!
Let me say one last thing, as a Lotus nut (having owned one for most of the last 35 years) Proton are really interested in Lotus and are trying their very hardest to make a go of it, and I don't want to be misunderstood on that, my resevation is that for all the good intentions their marketing model is wrong. But I wish them the very best.
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