Andy Warhol was the man who came up with the 15 minutes of fame concept, and that’s what Lotus Cars pursued at its Paris show press conference. Most of the show’s 31 press conferences on Thursday were scheduled for 15 minutes, and Lotus crammed six new product presentations into that meager time span. To understate the obvious, doing so was an ambitious plan. But it also was an appropriate one, because it’s a microcosm of the challenge that Lotus has assigned itself: as many as six new cars over the next five years.
For all its glorious heritage in sports cars and Formula 1 racing, by 2009 Lotus had become the English Patient, struggling along with the Elise and Exige while waiting for the new Evora to be ready for market. The health-related retirement of long-time CEO Mike Kimberley in July of that year didn’t help, and the much-delayed Evora hasn’t produced the market response the company had hoped for.
With global showroom performance steadily declining—Lotus anticipates about 2400 sales for 2010, just 850 of them in the U.S.—two inconvenient truths became unavoidable: First, although the engineering and consulting side of the company is profitable, the car side was generating increasing quantities of red ink, and insolvency, the kind from which a company does not emerge, was looming large. Second, to avoid extinction, Lotus had to do something dramatic, and pronto.
Bahar the Bold
Enter Dany Bahar. A 38-year-old native of Switzerland, Bahar became the new Lotus CEO in October 2009, coming from Ferrari, where he served as a senior vice president for brand management. Prior to that, he was a corporate projects manager with Red Bull, working with the company’s NASCAR and Formula 1 programs.
Bahar promptly lured Ferrari design chief Donato Coco into the Lotus fold, and raided other prestigious European shops for executive talent. This has given Lotus Cars a distinctly international flavor in its upper-management suite. Of the top 11 execs introduced at a pre-Paris media event, exactly one was born in the U.K. With his new team on board, Bahar and crew went to work on plans for corporate revitalization.
What has emerged is nothing if not bold.
Lots of Lotus
As noted, the plan involves the launch of as many as six new cars over the next four years, including an all-new Elise. You can read about each of them in the stories linked to the right. Beyond that, work is already underway on a new manufacturing facility at the company’s traditional home at a former World War II air base near Hethel, England.
You might reasonably ask how Lotus Cars, with its decks awash financially, is going to pay for all this. The short answer is Proton Holdings Berhad, the Malaysian holding company that owns both Proton and Lotus Group. According to Lotus execs, £770 million (more than $1.2 billion) has been pledged over the next 10 years to see the revitalization through.
In many businesses, that would be a substantial stake, but the car business burns cash at a pretty frightening rate. Lotus isn’t saddled with big powertrain development costs, and its station-build assembly, where the cars are riveted and glued together, eliminates a lot of costly tooling and robot welders.
Nevertheless, even with some production outsourcing—Lotus plans to have its front-engined cars assembled by other unspecified shops—the company has set goals for itself that are difficult to view as plausible. In addition, aligning itself directly against Porsche, as this lineup of cars seemingly does, makes the challenge even greater.
It’s hard not to root for Lotus, a company that’s furnished so much fun for so many drivers through almost six decades. But it’s also hard not to be skeptical of its plan for survival.