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(I find it interesting that LCNA does not consider California the strongest market ...)


Lotus to Go Slow in Expanding Dealer Network

By Herb Shuldiner

WardsAuto.com, Jun 2 2004

Lotus would like to increase its dealer count to 52 in the U.S., but a short supply of the new Elise means expansion will have to wait.







NEW YORK – The hot sales start of the new Elise sports car has Lotus Cars USA cautious about expanding its small dealer network.

With more than 2,400 orders – complete with deposits – on hand at the importer’s 39 dealers in 29 markets, the Elise already is sold out in the U.S., and adding more showrooms now would mean taking cars away from existing franchisees, executives say. (See related story: Long-Awaited Lotus First-Year Sellout)


Lotus dealers have taken more than 2,400 orders for new Elise.
“We’re cautious about expanding the dealer network,” Mark O’Shaugnessy, director-sales and marketing, tells the International Motor Press Assn. here.

John English, newly appointed president of Lotus Cars USA, says he believes the brand needs 52 dealers in total, but that 33% expansion from where Lotus is today won’t happen this year.

"My (piece of the) pie is a static number," he says of the number of vehicles the importer will get this year. "I would have to take cars from existing dealers."

While he is reluctant to do that, “we might put one or two more dealers in business by the end of the year," he says.(See related story: Lotus to Add U.S. Dealers as CEO Leaves Post)

Lotus has said it plans to add up to five dealers in the Northeast (where O’Shaugnessy predicts the strongest sales, along with the Chicago area), as well as Kansas City, KS, and the Carolinas.

English says new dealers need an investment of $1 million in floor planning, $30,000 in parts and $3,000 in signage, plus $500,000 in working capital.

"We're not asking for exclusivity," he says.

Most dealers have stopped taking deposits for the Elise because of the tight supply, executives say.

The Elise bases at $39,900, but O'Shaugnessy predicts an average transaction price of $41,000-$42,000 for the U.K.-built roadster. About 45% of orders so far have included the optional sport pack that costs $2,480. A removable hardtop also is available for $1,475.

The Lotus assembly plant in Hethel has a capacity for 5,000 cars annually.

The Elise was designed by the Lotus studio in the U.K., which already has several other cars on the drawing board. However, no launch dates for other models have been set.

"Our dealers can't be successful with one model," O'Shaugnessy says.

In addition to the Elise, Lotus offers the Esprit, but that car is going out of production and only 60 units remain in inventory. Last year, Lotus sold 99 Esprits.
 

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I think this makes a lot of sense for them right now. The first year is already sold so why put time, effort, and money into expanding right away? I also don't think it would be fair to dealers or current deposit holders. If a new dealership opens up, that would mean I might get my car later and someone that just got on the list might get one right away.
 

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"Strongest sales expected in Northeast"
according to O'Shaughnessey. If I remember my geography from school, that doesn't include 'Left-Coast' or Southeast as we have been led to believe.
 

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If a dealer was required to make the financial and physcial investments outline (and frankly they should have to), they would not be able to "open their doors" for at least 18 months. Needless to say, by then the demand for the current Elise will be lessened and the new Elise, along with hopefully a couple of new stablemates, will be just around the bend. Good timeing.
 

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The figures quoted as far as costs make absolutely no sense, dealers are going to be lucky to get 8-10 cars in three months, how could you ever hope to recoup your investment?

Chris
 

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Ridgemanron said:
"Strongest sales expected in Northeast"
according to O'Shaughnessey. If I remember my geography from school, that doesn't include 'Left-Coast' or Southeast as we have been led to believe.
Ridgeman - you have been MIA - it took a revival of the old east coast-west coast debate to get you back:D
 

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Chris,

I absolutely agree. My guess is that the dealer would utilize the traffic to sell other cars. Additionally, Lotus does plan to get to, and allow me to wince when I quote Mr. Hale, 10,000 cars per year.

Hey maybe the margins are much better than we're being lead.:D
 

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ivan1 said:
Ridgeman - you have been MIA - it took a revival of the old east coast-west coast debate to get you back:D
This should put to sleep all attempts to disparage us in the Northeast. Once our quadrant gets going, no place else is going to keep pace with us. We're like 'The Big Choo Choo' that can't be stopped once it gets rolling!:clap:
 
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