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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, 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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