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Lotus Taking New Approach to Growth: Practicality

New chief Gales pushes pragmatic approach to recovery.

by on Nov.26, 2014

Lotus recently celebrated its 1,000th car earlier this month. The company is taking a common sense approach to recovery.

The ongoing saga of Lotus is taking on a new twist: practicality.

It wasn’t long ago that the specialty carmaker boasted about plans to introduce several new models. However, the company has fallen on difficult financial times and seen a change at the top with Jean-Marc Gales taking over for the brash and confident Dany Bahar.

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In a departure from Bahar’s grand plan of multiple new models, Gales is prescribing a dose of pragmatism to help guide the company out of its tough times. Earlier this year, Lotus said it was going to cut as much as 25% of its global workforce as it figured out what to do next.

The result is Gales plan for a “logic-based” recovery, according to Autocar, which means bolstering the current line-up with some freshening until the maker’s finances improve to the point where developing a new model makes sense.

A new-look Evora appears to be the first step in the maker’s resurrection. The maker announced earlier this year that the Evora would remain available in the U.S. with the revised 2016 model. Not only is the new model compliant with U.S. safety regulations, it’s also getting a facelift, going on a diet and getting a some more giddyup. It’ll be introduced at next year’s Geneva Motor Show.

After that, Gales told Autocar, the Exige will get a freshening and then a new lightweight model like the 2-Eleven is coming.

“This brand is like a sleeping princess, but I believe she is starting to wake up,” Gales said to Autocar. Gales expects sales to rise from about 2,000 units this year to 3,000 next year.

That may be achievable as sales have grown this year and the company announced plans to expand its dealer base in North America.

(Lotus plans to make Evora U.S. compliant for 2016. For more, Click Here.)

“The North American market is vitally important for us and we intend to expand our dealer network and grow our sales volumes in the future,” he said earlier this year. “In fact in the last 12 months, we have already appointed three new dealerships in the USA and are on course to appoint additional dealers in the next few months.”

(Click Here for details about Alfa’s plans to introduce a midsize sedan in U.S.)

The rumors about a company in trouble have been swirling around Lotus for the last couple of years. Mounting debts and inconsistent car sales combined to create a recipe for financial disaster, after the company stormed into the Paris Motor Show in 2010 hyping five new vehicles and a new ownership group.

(To get a first look at the Mercedes-Benz CLA Shooting Brake, Click Here.)

In 2012, the company delayed the product introductions as it battled lawsuits and tax issues. Unpaid suppliers, due a reported $40 million, sued Lotus’ then-owner, Malaysian-based DRB-Hicom. Bahar also sued alleging wrongful termination and sought for $10.6 million. During that time it asked the British government for some time to catch up on tax debts.

Nonetheless, despite its many problems, DRB insisted it is ready to stand behind Lotus and hired consultants Ernst & Young and Rothschild to help it work out a financial turnaround plan. Founded in 1952 by the legendary racer and sports car designer Colin Chapman, Lotus Cars has been a financial basket case for most of its otherwise illustrious existence.

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2 Responses to “Lotus Taking New Approach to Growth: Practicality”

  1. Jorge says:

    It’s always a catch 22 when the brand needs increased sales to fund new models. How to best achieve the goal is the question. We’ll see if the pragmatic approach surpasses the audacious approach.

  2. nobsartist says:

    Lotus is a joke. I worked in engineering and I never met a bigger group of con artists. They couldn’t find their arsel with both hands.