Lotus facing increasingly uncertain future
New models put on hold amid mounting crisis at Hethel. Ollie Marriage and Jason Barlow report
TopGear hates to be the bearer of bad news, but the problems at Group Lotus do not seem to be going away. Following a turbulent summer that has included the dismissal of CEO Dany Bahar by new owners DRB-Hicom, the company is continuing to face pressing legal and supplier problems.
Most worrying for Lotus fans is the apparent cessation of all new model development. Previously it was thought that the Ferrari 458-rivalling Esprit, complete with its all-new Lotus-developed 4.8-litre V8 engine, had been green-lit, but now TopGear has learned that all future projects have either been significantly delayed or cancelled altogether.
At the same time, production was recently halted for a fortnight, amid continuing rumours that suppliers are having problems being paid on time: some suppliers are threatening legal action over non-payment.
TopGear has learned that Lotus has amassed millions of pounds of supplier debt which is now more than 90 days overdue. This leaves the firm open to winding up actions from its creditors. Lotus is also trying to defer other payments in an attempt to stabilise its cashflow.
As for the current model range, sales volumes remain low. Finished production versions of the new – and utterly brilliant – Exige V6 (pictured above) have yet to reach dealers. This can only be having further catastrophic impact on Lotus’ bottom line.
Although there have been no staff redundancies, TopGear understands that freelance design and engineering contractors have been released, leaving departments short-staffed. We have also learned of a number of personnel difficulties within the company as the new owners bring in their own managers from Malaysia.
Meanwhile, ex-CEO Bahar, sacked in early June for alleged gross misconduct, is suing Lotus for wrongful dismissal, as are the Heads of HR and Legal, both of whom were dropped from their posts this summer.
On top of this, future marketing activities have been cancelled. The firm won’t be at this week’s Paris Motor Show, and has confirmed it won’t attend next March’s key Geneva motor show either. This would suggest the firm will have no new product to communicate or display – at a time when it would ordinarily be seeking to make as big an impact as possible.
TopGear approached Lotus to comment on the current situation and was told: “Our plans include the strengthening of our dealer network, increasing product visibility and brand awareness and ensuring that we position the cars and the brand correctly. We will only announce new products when they are ready, that there is a robust business case matched to a solid future plan, and that we will not share our plans as we wish to maintain our competitive edge.”
Lotus would not comment on whether development of the Esprit was continuing, or how many cars have been sold this year. When asked if suppliers were being paid on time, we were told, “Lotus’ supply chain is very important, but so is the performance of the suppliers. The company is heavily focussed on further strengthening of productivity, efficiency and quality activities covering engineering, production and suppliers. These continuous improvements are necessary to meet Lotus’ new internal standards. We are addressing both our supply chain and our cash flow management and that suppliers are delivering what we need. There has been no interruption and with the strong support from our parent company, suppliers are confident to deal with Lotus.”
DRB-Hicom, the Malaysian firm that bought the previous Lotus owners, Proton, earlier this year, has yet to publicly announce a new business plan for the Norfolk firm, although Lotus told us that, “We expect to communicate more of our plans in the near future.”
It is clear that Lotus remains a troubled company, and this makes TopGear very sad. We love Lotus and believed – provided investment was forthcoming – that it had a bright future under the stewardship of Bahar and his management team. But with unsettled staff, delayed cars and mounting debt, we now fear for its future.
This is a great shame as the two latest cars we’ve driven, the Exige S and Evora GTE are proof positive that Hethel can build awe-inspiring driver’s cars. There’s certainly no denying the abilities of the talented workforce at Hethel, nor the firm’s long history of innovation and engineering. Fingers crossed there’s a plan forthcoming to back up the potential…
Words: Ollie Marriage and Jason Barlow