Group Lotus, the Norfolk, UK-based specialist sports car maker and engineering
consultancy owned by Malaysia’s Proton, will this week axe next year’s
new sports car launch, The Financial Times reported.

Instead, the M250 model, previously displayed at motor shows, for which Lotus
holds 1,500 advance deposits, is to be redesigned for the U.S. market.

It won’t now debut until 2004 or 2005, the FT said, adding that Lotus
would refund all deposits worth upwards of £3,000 ($US4,200) each.

The newspaper said Lotus on Wednesday would announce its restructuring to boost
production and move further into the North American market where it has previously
dabbled.

That move could see steel-bodied Lotus cars rolling down Proton assembly lines
in Malaysia. In Norfolk, Lotus hand-fits plastic composite bodywork to aluminium
base structures.

The FT said that Proton can produce more than 200,000 cars a year but it is
not known how much of this could be turned over to producing Lotus models.

The move could make strategic sense as the Malaysian domestic car industry,
in which Proton is dominant, is soon to come under pressure from increased imports
from nearby countries in the Asean free trade area.

As part of the restructuring under new chief executive Terry Playle, the FT
said, Lotus will be split into three operating entities: consultancy engineering,
car manufacturing and a new commercial division to develop dealer networks and
marketing programmes.

Playle told the FT that he believed the planned new sports car, if re-engineered
to comply with North American laws, could help lift Lotus sales to 15,000 a
year.

Last year Lotus made 2,900 cars, mainly its stripped-out Elise roadster.

But output is increasing to around 6,000 this year with the addition of the
Elise-based Vauxhall VX220/Opel Speedster built under contract to General Motors.

Lotus has installed a new assembly plant with capacity to build 10,000 cars
a year for the contract.

Lotus currently has 1,700 employees, the FT added.