News article - Lotus on track for turnaround despite £12m losses - LotusTalk - The Lotus Cars Community
 
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post #1 of 5 (permalink) Old 01-19-2011, 02:02 PM Thread Starter
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Post News article - Lotus on track for turnaround despite £12m losses

Lotus on track for turnaround despite £12m losses

Sports car brand and engineering consultancy Lotus has reported a £12m loss last year despite an uplift in sales.



By SAM WILLIAMS, Senior business writer

Wednesday, 19 January, 2011
5:49 AM

Latest accounts show Lotus Group International saw turnover rise 26pc to £139.3m in the year to 31 March 2010, lifted by orders of the firm’s latest model, the Evora.

But the company was hit by rising operating costs and currency fluctuations, resulting in £12m losses for the year.

Lotus has today confirmed it remains “on target” for a return to profit under a five-year turnaround plan.

The results also represent a 17pc improvement on the previous year in which the firm, owned by Malaysian car maker Proton, recorded losses of £14.6m.

Under the leadership of chief executive Dany Bahar, appointed in September 2009, the plan will involve increasing production from 2,700 to between 6,000 and 8,000 cars per year, including five new sports cars unveiled at the Paris Auto Show in October.

But it is unclear where the new models will be built.

The company is expected to submit a bid for £40m from the government’s Regional Growth Fund (RGF) by Friday, which would be used to expand its facilities at Hethel, which the company says would result in 1,000 new jobs.

But if the bid is turned down Mr Bahar has said he intends to shift production to existing European plants.

A spokesman for the company said: “Group Lotus’ five-year plan is on target, and we are on track to submit the RGF bid by the deadline on Friday.”

A directors’ report in the accounts said: “The financial year ended March 31 2010 was a challenging year for the group.

“Whilst an improvement on the past year, the growth of the group was restricted by the continuing weak market conditions, fragile consumer confidence, increased competition, cost pressures leading to increased operation cost and the volatility of the pound sterling.”

The Lotus Cars arm saw revenues increase by 35.3pc to £99.7m, it added, mainly down to Evora sales, selling 2,715 cars across 32 countries.

Hethel-based Lotus Engineering - the firm’s engineering consultancy operation - also recorded 7pc growth to £39.1m, resulting from a “sustained market-driven strategy” and efforts to “retain and enlarge its client base”.

The statement added: “Looking ahead to the new financial year, the primary focus is to ensure that the business continues to grow using the resources available while introducing additional measures to control operational costs.”

The company is also offering a $1m “Exos Experience” to wealthy Lotus enthusiasts, offering a Lotus Type 125 for sale along with the opportunity to drive the Formula One-inspired car on a racing track.

Three have already been sold, with 15 potential further customers due to test the car in Abu Dhabi at the weekend.

Last week, police in the West Midlands began using a Lotus Evora as the UK’s fastest patrol car under a two week loan.

(via edp24.co.uk)
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post #2 of 5 (permalink) Old 01-19-2011, 06:29 PM
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Sobering. For every car Lotus sells they lose ~$7,000. Hopefully there is something in that gameplan of theirs that fixes the high cost position. It's a rare thing to be able to differentiate your way out of a cost problem (i.e. move upscale) AND turn a profit.
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post #3 of 5 (permalink) Old 01-19-2011, 08:57 PM
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There is something seriously wrong with this picture...

Lotus doesn't have $ to upgrade the factory for the projected new models they intend to build - but they have $ to enter various forms of motorsports??? And they expect to dangle a threat that unless they get the governments RGF, they will build elsewhere.

Also to clarify - there was only just over 460 more Lotus sold in 2010 than in 2009. Roughly 84 cars per each of the 32 markets they are sold in which equates to about 14 more cars per market this year than last. That is awful. It is a good thing they have the engineering operation to keep things somewhat balanced.

It is interesting the directors report suggests...
Quote:
“Whilst an improvement on the past year, the growth of the group was restricted by the continuing weak market conditions, fragile consumer confidence, increased competition, cost pressures leading to increased operation cost and the volatility of the pound sterling.”
None of which supports the premise for moving more upscale or trying to move the base in 5 years - but I digress...

Most auto companies saw a more significant rebound/growth than 460+ cars sold in 2010. My interpretation is that either this doesn't bode well for the new Evora or shows the changes to the Exige and Elise were not well recieved. Exige sales tanked with the 2010 restyle - which began in the UK in mid 2009. The 2011 Elise began selling in mid 2010 - so not sure there is much impact to measure there except according to the SMMT (SMMT 2010 Sales Data Article) Lotus's big downturn did happen in the last half of the year.

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post #4 of 5 (permalink) Old 01-19-2011, 09:41 PM
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They need to make lighter cars-- that's how they will succeed. They need to make a new car is a stick shift and weighs around 1600 pounds. That will sell like droves.



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post #5 of 5 (permalink) Old 01-19-2011, 09:49 PM
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Quote:
Originally Posted by Ali.Maadelat View Post
They need to make lighter cars-- that's how they will succeed. They need to make a new car is a stick shift and weighs around 1600 pounds. That will sell like droves.
I would buy one. I can name at least four cars that Lotus could do that I would absolutely buy. Compared to the five that they showed, only one of which possibly interests me and which I would have to compare to a couple bigger rivals before deciding. But I know that means nothing to you.

I'm curious - are all of your Ferrari buddies ready to jump ship and buy a Bahar Lotus instead of the next F-car?

EDIT: God knows that Mazda lost their shorts doing almost exactly what you described - as a modern version of a classic Lotus no less. If Lotus would have built the Miata in 1989 where would they be now? Building the best selling sports car in history leaves a lot of money to spend developing halo cars and race programs.
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