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When sports car company Lotus had announced the end of its title sponsorship of the Lotus F1 team, a red flag was raised as concerns over Group Lotus’ financial problems surfaced. Now, new reports reveal that the troubles facing the automaker are more than meets the eye.
Earlier warning signs were brought to attention this year when Lotus’ Malaysian parent company Proton sold a controlling stake to another Malaysian conglomerate, DRB-Hicom. As per Malaysian law, Lotus had to halt all business operations and freeze its financial accounts during the 60-day transition period.
The 60-day period ended in March and now, new owner DRB-Hicom is currently conducting the due diligence of Group Lotus, investigating worrisome figures including Lotus’ $320 million in accumulated debt.
Due to the mounting concerns, rumors have spread that Lotus may be put into administration to free itself from debt and that even CEO Dany Bahar has been let go from the company. What’s more, in line with our reports earlier this year, Chinese automaker Zhejian Youngman Lotus Automobile (Youngman) is a potential buyer of the brand, placing a bid on its remaining assets, including naming rights. The official importer of Proton and Lotus cars in China, Youngman is perhaps better known for its past failed attempt to purchase the now defunct Saab.
So far, a Lotus spokesperson has denied these rumors and insisted that DRB-Hicom and Lotus executives are working to keep the business running as usual, ”There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia. Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1 to bed.”
The spokesperson adds, “It’s no secret that we are going through a very difficult time at the moment due to the change in ownership but we’re doing everything we can to get through this period and come out the other side stronger than before.”
Optimistic words, but something definitely isn’t right in the house of Lotus. Stay tuned for more information as the situation continues to develop.
Dany Bahar, the current CEO of Lotus is reportedly looking for a buyer to purchase the company from current Malaysian parent Proton.
Given that Proton itself was recently acquired by Malaysian conglomerate DRB-Hicom, the reason for Bahar’s strategy is probably the fact that DRB has little interest investing in a small volume specialty sports car brand, especially since Lotus hasn’t earned a profit since being originally acquired by Proton in 1996.
At present, Lotus requires funding of around £500m ($790 million) for the development of future street cars, which includes new Elan, Elise and Esprit models.
So far, no offers for purchasing Lotus have been confirmed, though some sources say that Genii Capital, the international investment firm which currently owns the Lotus Formula 1 Grand Prix team, would seem the most likely scenario, though reportedly a number of Chinese companies have also expressed interest.
[Source: Auto Express]
Lotus impresario and well-coiffed CEO Dany Bahar has denied reports that he’s planning to divorce Lotus from its Malaysian parent company Proton—right after he mentioned that, well, he might.
During a recent interview, Bahar mentioned that he wanted to bring Lotus up to Porsche-killing standards, and in order to do so, he would have to leave Proton behind and shack up with a bigger sugar daddy, one capable of treating Lotus right. That company, he suggested, was Toyota: given Lotus’s now-tradition of using their engines, it only made sense.
But according to Bahar himself, “Proton has played, and continue to play, a crucial role in our development.” His vision for Lotus’s five-year plan includes Proton every step of the way, including Proton’s help in securing funding for Bahar’s next two-door/mid-engined/aluminum-spaceframe sedan/SUV/Cayman-killer GT/track-ready city car project.
“We have an incredibly strong relationship with Proton, they support us 100 per cent and frankly this is really important for a company like ours,” said Bahar.” Part of the business plan is the joint development of a global small car platform meaning that for the first time in the Proton Lotus history, the relationship will be mutually beneficial. This alone should demonstrate how close we are.”
Let’s hope that pre-nup’s still valid.
While Hyundai‘s undoubtedly been on a roll lately, they haven’t quite managed to bend the laws of physics, despite what their newest stunt may suggest.
Hyundai’s Malaysian arm suspended a 2012 Accent from the vertical face of a building, and had a driver wearing some futuristic garb descend towards the Accent. Through the use of some trick 3D projection and properly spinning wheels, the Accent really looks like it’s driving. Check out the video below.
Malaysian automaker and Lotus Cars parent company Proton has announced the results of talks with Volkswagen and, well, there’s nothing to report. Like previous talks from several years back any planned collaboration between the two companies has been axed.
According to previous reports, a deal between the two automakers would see Proton get platforms and engines from VW to use for new models in its home market, while VW would presumably get getter access to Asian markets. It’s likely that VW’s recent stake in Suzuki has made that mostly redundant, while an ongoing Proton-Mitsubishi partnership would only have complicated the bargaining process.
Partial or full ownership would likely have given Proton a more secure future, and the same can be said for Lotus. The German automaker has done incredible things for once-nice brands like Lamborghini and it would have been exciting to see what a collaboration between Lotus and VW could have led to.
In the past few months Volkswagen has expanded to become an even larger global player, taking over Porsche and announcing a majority stake in Italdesign Giugiaro. Now Germany’s largest automaker may be looking to add yet another brand to its stable – Proton. The Malaysian automaker might not be all that familiar to audiences in North America, but we’re certain you’ve heard of its sports car division – Lotus.
During a press conference to announce the company’s return to profitability, Proton Chairman Mohamad Nadzmi Mohamad Salleh commented that the company is in talks with Volkswagen and that, “We will make an announcement in one to two weeks.”
There’s no word if Volkswagen is looking to take a part of Proton or if its just a technical partnership. VW and Proton were engaged in similar talks in the past but they fell through. A new car market with an increasing need to exploit economies of scale is likely the main reason both automakers are back in talks.
According to once source, Proton is likely looking to purchase VW platforms and engines and rebadge them for sale as Proton models overseas. Company executives have not commented on if the tie-up specifically involves the Lotus brand.
[Source: Canadian Business]
Lotus is set to return to Formula 1 next year and with a dedicated group of followers and the media circus that surrounds any British F1 team, the company has released some of its plans and ambitions for the 2010 season, along with the first full-sized wind tunnel model.
Lotus F1 Racing Chief Technical Officer Mike Gascoyne said in an interview-style statement that while the team as huge challenges ahead of it with such a short preparation time, it hopes to have a full vehicle ready for February testing.
As for the car, Gascoyne says the Lotus team is working with Fondtech for the aerodynamics, Xtrac for the gearbox and a deal with Cosworth has been arranged for the engine company to supply engines. Gascoyne also comments that the team is working with technical experts in Malaysia. In fact, the Malaysian connection is a big part of the Lotus team with financing coming from both the country’s private sector as well as through the Malaysian government. In return, Malaysia intends to use the team as a marketing expert to help promote the country on the world stage. In addition, Lotus has a long term plan to set up an engineering center at the country’s Sepang race circuit.
With a long and storied history in motorsports and Formula 1 there are a lot of expectations behind the Lotus team, but Gascoyne says they have to be realistic. “We are a new team and we are starting our development late,” he said, “so it will be an achievement just to get two cars on the Bahrain grid. I hope by the middle of the season we will have established ourselves as the best of the rookie teams and then continue to make forward progress for the rest of the year.”
As for the driver’s Lotus is entertaining several offers and no doubt trying to poach some experts from other teams. One of the leading candidates is rumored to be long-time Toyota driver Jarno Trulli.
Official release after the jump:
Lotus CEO Mike Kimberley has announced his retirement as the head of the U.K. based sports car maker due to medical reasons. The 70-year-0ld Kimberley has been suffering from severe back pain, underwent surgery in 2008 and has now been advised by his doctors to resign his position.
“Sadly, it is on doctor’s orders that I am stepping down but I will leave confident that Lotus is in great shape with a strong management team fully supported by our shareholder in Malaysia,” Kimberley said in a statement. “It’ll be very hard to leave knowing that there are such exciting times ahead but I’ll take with me many very happy memories. I want to extend my thanks to the company’s shareholder for their unfailing support, my management team and the wonderful staff both at Hethel and at our various operational locations throughout the world. Most of all I want to thank our Lotus customers and loyal fans worldwide for their support over the years.”
Kimberley started his career with Jaguar in 1953 and has since worked in the automotive industry for 56 years. He joined Lotus in 1969, leaving in 1992 to pursue other opportunities with companies like General Motors and Lamborghini, before returning to Lotus in 2006.
Since then Kimberley has over seen the production of the Evora, as well as the expansion of Lotus Engineering, a world renowned high-tech engineering firm.
Kimberley will officially retire on tomorrow, July 17th.
Official release after the jump: