Lotus Danny Bahar

Lotus' Danny Bahar

Proton has been propping up Lotus cars for many years and has emerged as a key player in funding the British sports car company’s ambitious new product plans.

It has put GBP100m behind the new Lotus models announced last year at the Paris motor show, but Proton is unlikely to keep pouring cash into its British affiliate.

Lotus chief executive Dany Bahar said: “Smaller companies will need to be associated with bigger groups to benefit from economies of scale particularly as emissions and safety legislation gets tougher.

“Proton has spent a lot of money on Lotus, probably a lot more than they would have liked, and I am sure that one day they would like to see that money back. With the plans we have and the success of Lotus Engineering, now, for the first time Proton can get the benefit from their subsidiary.” 

Lotus stunned Paris show-goers last September by unveiling five new models, the Elise, Elite, Esprit, Elan and Eterne, as well as a concept city car, which will all be on sale by 2016. 

They will be the result of a GBP500m, five-year business plan and Bahar said that funding is now in place as of the end of March.

In addition to Proton’s GBP100m, Lotus has taken GBP270m in loans from Asian banks while the rest will be funded from sales of existing models and work carried out by Lotus Engineering.

The city car will be jointly developed with Proton which will give the Malaysian company a global small car and Lotus a sporty little ‘un, just like Aston Martin’s Cygnet, based on the Toyota IQ.

Regarding the Paris show car, Bahar said Proton and Lotus have now developed an all-new platform for the car which is due to be launched in 2014.

Bahar also said that feedback from Paris was behind the decision to reconsider the timing of one of the five cars revealed at the show.

He said: “There were three main issues – two of the products, Esprit and Elan, were too close. Both two-seat, mid-engined sports cars but actually their performance was very similar. So, we have kept Esprit and moved Elan to a second cycle to be produced at a later date.”

Bahar revealed that there was also a lot of strong feeling about the engines the company planned to use.

“Feedback told us the Yamaha-developed unit was just not ‘Lotus’ and so we embarked on a project to develop our own family of engines, V8, V6 and eventually an in-line four. There is obviously a big cost involved in going down this route, but by putting back the Elan that has given us more capital expenditure headroom.

“We are developing something along the lines of the Ferrari V8. The project was started in November and we plan to have the first prototype running in July.”

A third issue raised out of Paris was whether Lotus needed a four-door model -the Eterne grand tourer. 

Bahar said: “We can argue about that forever. From my point of view, we are spending GBP130m on the Elite platform, whilst we’re doing this, it makes total business sense to invest a little further and create a four door model.”

With headquarters remaining in rural Norfolk, does Lotus have trouble attracting top quality engineers? Bahar said: “Not really. Norwich is not a bad place and it now even has a premiership football team. We have been able to attract people from companies such as AMG and Porsche because we can offer a job where they can be hands-on and really make a difference in terms of rebuilding the company.

“We might not be able to match the wages of bigger companies but we offer the challenge of reviving a sleeping giant.”

What about F1 aspirations? “It’s not just about F1, motorsport in general is a key ingredient to our marketing strategy. We have always been and will always be an automotive brand that is associated with racing. We want to win though, not just participate. But we don’t expect everything over night, we start slowly and gradually build up our presence in a way that makes sense for our business. Look at our involvement within IndyCar, we started last year with one car, now we have three and from next year onwards we’ll be offering engine and aero packages. If we couldn’t afford it we wouldn’t do it.”

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