The UK government have giving a grant of £10.44m to Lotus in order to aid their recovery. The Hethel headquarters got a visit from Vince Cable, the UK Business Secretary where he announced the grant which had been provided by the Regional Growth fund.
This will allow Lotus to train 313 new staff who will be joining the company over the next few years as well as give them funding to develop new models.
This will be a big boost to Lotus and it accompanies other good news such as the £100m investment from DRB Hi-Com and a programme to hire 100 graduates, which should all help to keep the company going. This is a big difference from the problems that the company have been in.
Just two years ago the company came very close to going under. The advisor Tim Purves announced that the company was doing very well developing new designs and engines and everything was good. However, just a month after this DRB Hi-Com took control of Proton who are the parent company that owned Lotus. They put a stop to the new developments planned and since then there has been no news on anything new going on.
It seems that things are definitely turning around though with the news that there will be 100 new staff employed who will be made up of graduates and engineers with manufacturing operatives so that new designs can be developed.
Sales are also starting to recover, especially with an increase in business from abroad. In 2011 they sold 2675 cars total but just 963 in 2012. However for 2013 the prediction is that sales will be 1300 and in 2014 2000 with 44 cars a week being made.
It is not known whether any new models will appear soon though. There was advanced development of the esprit with the V8 engine having been tested in Ferraro 458 and Evora test vehicles and the show cars had their detailing finished. These were set to launch this year but they are still officially on hold at the moment.
However, there are plans to make variants and produce face lifted versions of the current models. Most sales are abroad with 90% of cars being exported.UK sales have gone up by 38% but Lotus will be concentrating on increasing sales in Japan as well as the UK and driving new interest in India and China from an advertising campaign there.
The executives at DRB Hi-Com often make but announcements and so it could be that they will say something soon about their ambitions. They were thinking of selling lotus when they first took over the company as it has been losing money every year but one since 1996 and there were some companies that looked at the books in interest. However, the owners have now signed up to a three year plan where they want to turn around the company. They are investing £100m in order to keep it stable.
In the last financial year the company lost £115m but they have not yet announced what this year’s accounts have been like. An outsider has admitted that the company is bankrupt and therefore the £100m is needed to keep the company going during the year.
The Executive Chairman of DRB Hi-Com, Datuk Mohd Khamil Jamil explained that they were hoping to get the company to break even by 2015 and to do this they would have to sell 3500 vehciles a year. This is half the amount that was anticipated with the Elan 911 rival, luxury cabrio, limousine, Esprit supercar and new Elise.
The motorsport side of things is said to still be in profit with the Evora GT4 racer and one make series around the world being competitive. It is expected that the division for motorsports will sell 120 cars next year and it has sold five of the £500,000 T125 F1 style track cars.
However, making the firm profitable could be very tricky, especially with no plans to launch new cars on to the market. Other British companies such as Bentley, Rolls-Royce and Aston Martin have grown very well but Lotus has missed out on this.
These rival companies are expanding the cars that they have on offer but with only a limited market for two seater sports cars they are going in to four door and SUV models as well. With Lotus remaining on just sports cars they are very much behind the times.
There used to be a big focus on quality and some models were capable of being built on the same line to save money. Global expansion has also been good but it is difficult to know where they will go now in order to keep the company afloat.