Lotus Vehicle Development on Temporary Hold, Long-Term Ownership Undecided
By Justin Berkowitz
When Lotus CEO Dany Bahar told Evo magazine earlier this month that new-vehicle development at his company was effectively on “lockdown” for three months, it was a signal flare sent to the world’s enthusiasts. Yes, we’ve thought for some time now that Lotus’s plans for an extensive new-model lineup were more vapor than valid, but even the most cynical observers figured that the company would, at minimum, roll out a new Elise and an Esprit sports car within the next two to three years. Even that reality appears to be in some danger now. (The Esprit is said to be delayed until early 2014.) Here’s a look at Lotus’s current situation, how the company got there, and what’s next.
Lotus Gets Sold
The freeze in Lotus’s product development comes as the result of business dealings taking place halfway around the world from the company’s Hethel, U.K., headquarters. Lotus has been owned by Proton Holdings, a Malaysian automaker, since 1996. Proton doesn’t open the books for Lotus specifically, but we know that the sports-car company has been losing money—and so has Proton as a whole.
Unhappy with the red ink, Proton’s owner—a sovereign investment fund of the Malaysian national government—is in the midst of selling a controlling interest in the entire company to an enormous Malaysian automotive conglomerate. The soon-to-be owner is called DRB-Hicom. Among other activities, it’s the local assembler for several Mercedes-Benz and Honda models.
Frozen, But With Changes Looming
Under Malaysian law, only day-to-day business operations are permissible at Proton and Lotus until the deal to sell them goes through. This effectively pauses work on future Lotus models for now. But even when that moratorium lifts later, life in Hethel could be quite different. Executives at DRB-Hicom have told Malaysian news outlets that they are planning a new management team for Proton, and we can confirm that significant changes are coming. This likely will mean Dany Bahar has a new boss—but we have heard from one source in Malaysia that he could even be ousted altogether.
Yet another scenario sees Lotus jettisoned from Malaysian ownership entirely. DRB’s managing director said at a press conference in January that he was open to the idea of selling Lotus. For Proton and DRB-Hicom, this might be a good way to streamline operations and cut a loss-maker from the balance sheet.
Independence from Proton would probably be good news for Lotus, too. While the notion of a six-sports-car Lotus lineup continues to strike us as folly, the company has taken real-life steps forward in making serious money as engineers for hire. This has been a longtime area of expertise for Lotus, but the last year has seen some tangible growth: Check out the Lotus-based Infiniti Emerg-E sports car for evidence. Not only does the Infiniti use Lotus bones, but it features the British company’s new range-extending system for EVs, licensing for which is being shopped to other automakers, too.
If Lotus is spun off, the most likely scenario would see a consortium of international investors buy pieces, similar to what happened with Aston Martin. Alternatively, any one of a number of cash-flushed Chinese automakers could make a bid for the company. One particularly logical suitor is a company called Youngman, which sells rebadged Protons in China under the Lotus brand name, and which has worked with Hethel in engineering cars for the Chinese market. And Youngman is hungry: It was one of the final bidders for the pieces of Saab during that company’s collapse. No one at Youngman answered requests for comment.
Once the sale of Proton and Lotus to DRB-Hicom is finalized later this spring, we’ll have a better idea of what’s planned for the historic sports-car manufacturer. Even if Lotus isn’t spun off, we expect major changes to the company’s budget. Had the full six-car monty not been officially off the table before, it may be soon.
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