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Lotus facing increasingly uncertain future

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Top Gear 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 Top Gear 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.
Top Gear 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, Top Gear 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.

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. 

Gear 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.”

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.”

is clear that Lotus remains a troubled company, and this makes Top Gear 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

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  

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