A confident Dany Bahar acknowledges the plan to revive Lotus is super-ambitious

A confident Dany Bahar acknowledges the plan to revive Lotus is 'super-ambitious'

Lotus Group CEO Dany Bahar has set out a medium-term growth strategy to revive the Proton-owned unit and return it to profitability. 

Bahar told journalists in London that he would like to see Lotus become a 'British Porsche' rather than take on Ferrari, with the brand built up through motorsports activities and a raft of new models, racing and selling cars in every sports segment.

He also expressed a preference for Lotus to do more to develop its own engines. 

"We have plans underway to think about our own engine family in our road car programmes for the future," he said.

"The fact that we have announced that we will be developing an engine for Indycar for 2012 shows already that we are heavily interested in becoming an engine manufacturer with our own brand."

Bahar acknowledged that the business plan for Lotus is 'super ambitious' and very aggressive. However, he said the finance is in place to fund new models and that the young management team can call on the experienced counsel of its advisory board, which includes Bob Lutz (ex-GM product czar) and Tom Purves (ex-BMW USA).

The plan on the automotive side is to transform the company with new models so that it becomes profitable over the next five years.

“We aim to hit operating profit in late 2014 or early 2015,” Bahar told just-auto.

Bahar sees the addition of new models as something that Lotus is well set-up to achieve because of its low-volume manufacturing expertise.

“It costs around GBP150m to develop a model in our low-volume part of the industry,” Bahar maintains. “But our manufacturing strategy means that we can do five models at the cost of only two and a half.”

The development synergies mean that total model development costs in the five-year business plan are held at GBP400m and shared vehicle architectures mean parts commonality among the new models at over 50%.  The Esprit, due to go in production in late 2012, will act as a 'donor car' for future models.

One area of continuing uncertainty is whether or not the new models, which will boost Lotus annual production to a level approaching 8,000 units a year, will be made in Britain. Lotus is talking to the UK government about loan guarantees needed to secure funding of around GBP46m for an additional assembly facility at Hethel which would employ a further 1,000 workers.

The dialogue with the UK government is now, after an initial lack of progress, going well, he says.

Bahar points out that there are good contract assembly options for Lotus if it decides not to go ahead with the Hethel expansion, principally with Magna or Valmet.

“If it is not UK, it will be Finland or Austria,” he concedes. “The contract assemblers are geared up to do the kind of business we are looking for [Valmet used to assemble the Boxster for Porsche] and can do it at an attractive price.”

One current fly in the ointment is the Lotus brand dispute in Formula 1.

Lotus Group, he said, wanted to be recognised as the owner of the Lotus brand with the right to enter any sports activity.

"We don't want other people to call their car a Lotus because the Lotus car is our brand," he said.

"I can see what our shareholders are trying to achieve with the other party. Since these are two Malaysian entities, I have confidence they will reach an amicable solution."

Lotus future model actions – market launch timings

Esprit – early 2013
Elan – mid-2013
Elite – mid-2014
new Elise – early 2015
Eterne – late 2015

See also:

PARIS SHOW: Lotus stuns tous le monde with five new models

UK: Lotus appoints new CEO (Dany Bahar profile)

UK/MALAYSIA: Proton wants Lotus to relive past glory

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