Tuesday, July 30, 2013

Lotus is Getting a Lifeline, But New Esprit Is On Ice

1977 Lotus Esprit (Euro-spec)

After spending decades trying to do too much with too little, Lotus now is just spending very little. Former CEO Dany Bahar’s plan for a five-to-six-model Lotus range was never completely serious—it was more meant to showcase Lotus’s expertise-for-hire—but development had progressed quite far on a new Esprit. Work on that sports car has, apparently, come to an end.

Speaking recently with a major Malaysian newspaper, an executive at Lotus’s new corporate parent DRB-Hicom said that that plans for future models had been canceled. In the short term, Lotus would be rolling out variants of it existing two-and-a-half-car lineup. What a shot to the gut.

It isn’t that the Evora, Elise, or Exige are boring cars—they’re among the most entertaining on the road, at any price. We’re fine with Lotus cramming supercharged engines into the trio. We’ve even made peace with the confusion inherent in the Exige roadster, since the Exige was supposedly a coupe version of the roadster called the Elise. A Lotus isn’t really supposed to be competitive with a Porsche any more than Savile Row challenges Neiman Marcus, but all three Lotus models are aging rapidly. Two aren’t even available as road cars in the U.S. anymore. Fresh metal is needed to keep the brand name strong and credible here, in what should be Lotus’s largest market after the U.K.

The cuts really shouldn’t be interpreted as penny pinching by DRB-Hicom, which is a large, well-funded corporation that has extensive experience in car manufacturing. DRB has poured more than $100 million into Lotus, in large part to pay down the immense debt racked up during the wide-eyed Bahar era. (Swizz Beatz cameos don’t come cheap, you know.)

So, why the cuts? Tan Sri Mohd Khamil Jamil, the DRB managing director who gave the interview, suggested that Lotus’s financial situation has been “cleaned up” and that the company is finally ready to move forward. In other words, the Lotus balance sheets were covered in red ink—although the engineering division, we’re told, was just about profitable—and that needed sorting before any new product could be considered.

This is sensible business, and of all companies, Lotus needs a big dose of that. But we are—as all gearheads should be—left wondering about the fate of the Esprit. There’s a strong case that a $100,000-plus sports car was the wrong product for Lotus, a brand that will never be able to match the panache and established image offered by Ze Germans. Even still, Lotus was into advanced development and testing on what was supposed to be its range-topping sports car, and shelving it means the investment probably will never be recovered.

At least a little cash is flowing into Hethel these days. Sales are up this year—although we’re still talking double digits to double digits. Last week, the British government just granted Lotus’s application for a £10-million investment from one of the country’s regional growth funds. It’s not meant to cover the remaining development on the new Esprit—it’s not enough, anyway—but it shows that the company has enough irons in the fire to stick around until we finally see some truly new cars.

1 comment:

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