Building a future for Group Lotus

Group Lotus CEO Dany Bahar would be the first man to admit that time proves everything.

On the one hand, it is a mantra he would like dished out to the critics and cynics who have questioned his ambitious (some say over-ambitious) moves in both the road car and motor racing spheres.

He will argue that only time will show that his bold plans to expand the Lotus product range and push his company's racing activities wider than they have been for decades can hit all the targets that have been set.

On the other hand, time also increases the pressure on Bahar to show that his aggressive business plan is not too much - and that he has not overstretched the company on the roads and the race tracks in a move that could threaten its very existence.

Right now, we do not have the final answer. But a year on from Bahar making the first steps towards Lotus's new future, there are the first clues as to whether he is going to achieve those aims.

The launch of the dream

When former Red Bull and Ferrari man Bahar unleashed the company's future vision at the Paris Motor Show last October, there was a fair deal of scepticism throughout the industry.

Everyone loved the idea of the dramatic five-model expansion of the Lotus road car platform and a revitalised racing programme that stretched the company from the lower echelons of national GT racing all the way up to title sponsorship of an F1 team. But the big question was: just how was it going to be paid for?

Group Lotus bought into the Renault F1 team last winter © LAT

"It was more show and fun - to show the world what our intent was and what we were working on," said Bahar this week about that famous 'Dawn of a new Era' launch. "Now reality is to deliver what we promised."

And reality has bitten a little in the intervening period. For while it is very easy to dream of world domination, achieving it is another thing.

Primarily Bahar faced the money doubters. The motor racing programmes have required huge investment - and there have been rumours of funding already drying up - and that's before Bahar got anywhere near securing the supposed £1billion that some reckoned he would need to make a success of the road car programme that was supposed to sustain the whole thing.

Bahar's very public fight over the Lotus name in F1 has also done little to cement public support - for it has truly divided fans. There are those in the camp who suggest he has been nothing other than a bully to Tony Fernandes and Team Lotus in trying to stop them using the famous name; while others suggest that Bahar has simply moved to protect his Lotus brand from a man keen to eke as much money out of the Team Lotus moniker as he can.

Bahar is well aware that the detractors and the doubters are out there - but he is not fazed by it.

All that matters to him is that Lotus delivers on its promises: something he claims it has done to the letter so far.

"We presented the world with a five-year plan and up until today we have ticked all the boxes economically, as well as the targets set in terms of development," he says.

"Imagine if you get advances from banks and shareholders - you are under tight and strict control mechanics. So you can imagine we have to show with transparency where we are with a big project. We have shown year one of five is a tick in the box."

Year two started at Hethel this week, when Group Lotus opened its newly refurbished test track. It is one small step in terms of what it means for the future of the company - but it is a significant one in terms of perception for both the staff and those keeping close tabs on the developments at the company.

"You might say a refurbishment is not a huge achievement and I agree, but mentally to see one of the facilities being upgraded and finalised shows that things are getting into reality," Bahar says. "This isn't just about an opening of a track; this is to show our entire staff that we are doing things and delivering what we announced.

Lotus returned to Le Mans with the GTE Evora and finished seventh in class © LAT

"We realise that there have been some negative and cynical comments, but it doesn't stop us from trying to deliver the so-called unrealistic, over-ambitious targets - the kind ones call it ambitious or aggressive.

'I like the cynical over-ambitious ones, and the ones who say that to develop a sportscar you need £1 billion like Ford. I stopped reading articles like this, because it shows the gentleman has not done his homework."

So what is the cost then of developing a sportscar?

"The number that we are talking to develop a sportscar is pretty much the same for all sportscar manufacturers. It is £100-£200 million, depending on the content of the car, and we are rather on the lower end.

"The first car, which is the donor car if you like for our future cars, is more expensive than the following cars because all of them will have roughly 50 per cent of the contents. But I guess if I say a £150 million average I would not be completely wrong. I also know that the Ford Focus cost a £1 billion more."

The costs then are not as high as some suggested; and the money has been secured through a mixture of loans from parent company Proton and private investors.

As far as the launch plan for the other models goes, Lotus insists everything is on schedule. The new Esprit will be launched in March 2013, the Elite seven months later; the new Elise in 2015 and the Eterne, a two-plus-two sportscar, is estimated to appear in March 2015.

There is also a new Lotus V8 engine nearing completion - and the 4.8-litre unit (which could have a racing future too) is set to be fired up for the first time on August 18.

And yet there has been some scaling back of Bahar's initial dreams. On the racing side, the initial plan to rush into ownership of the Renault F1 team has been put on hold for now; and it is a matter complicated by the naming issue.

There have been changes on the road car side too. After launching the five new models in Paris, feedback from customers suggested that the new Elan was positioned too closely to the Esprit - so the Elan has been put on hold until at least 2017.

Road cars are a big part of Bahar's five-year plan © sutton-images.com

And while that means four new models coming on tap, Lotus this week announced plans for a new city car from 2014 - the Ethos. This is all down the line though - and for now the company's sales figures are pretty flat.

"We have to survive the next two years," says Bahar. "After the decision to delay the Elan we have changed the priorities, and we are heavily investing into the existing products, and we will come out with some new things in that area going forward.

"We have just finalised our financial projects - and the split of cars is pretty similar to what it was in previous numbers. I don't have exact figures, but it is pretty similar to last year, so we did not grow but we did not lose."

Bringing the money in

All the plans for the future, and the racing programmes going forward, are dependent on Lotus expanding its current sales figures of around 2800 cars per year.

The funding may well be there to create these new cars; the brand may be back in the public spotlight thanks to the motor racing push and the technical excellence at Hethel to create the sportscar, but it will be the public that decides where the next stage heads. And they will be voting with their cheque books.

"We have taken on this battle," says Bahar. "What we want is to not miss any sportscar segment out there, not to miss any opportunity. That is why our product range is so wide; that is why it starts with an entry level sportscar which is the Elise, which will always be an entry level sportscar, and then it goes up the range maybe to an Esprit and up to a GT two-plus-two.

"With the volumes we have considered to be the basis of our numbers we feel pretty confident it will be able to sell. In the case of the GT: 1000 units a year with a network of 150 dealers worldwide in 2014, I think we should be able to do that."

Bahar is also encouraged by possibilities opening up in the Asian market - and the fact that Japan is holding up in sales figures despite the terrible disaster that struck the nation earlier this year.

"The Asian market is the fastest growing market for us," he adds. "Japan is traditionally a very strong market, and even the recent tragedy there still did not impact on our things at all.

Bahar admits the Team Lotus v Group Lotus battle has confused many © LAT

"In Japan we are waiting every day for the numbers but every day as it goes the numbers continue. We have also introduced a new Chinese distributor, and before he even started he had sold 120 cars - which, out of 2000, is a lot.

"There is one other thing that gives us confidence to achieve our numbers. Currently we are only present in 32 markets, whereas all of our competitors are present in more than 50. So every single market we enter is additional volume for us."

Bahar interestingly argues that launching five new models is not actually an aggressive route for Lotus; it is a conservative one. He believes the company has to be realistic and recognise that it will only be able to sell a certain number of each models - and the fact that many of them feature common parts will bring costs down dramatically.

"To show how conservative we are - if we said we would sell 2500-3000 Esprits a year, then maybe three or four new models would not be necessary.

"But because I believe today our brand is not strong enough, we will not be able to sell more than 1500-1700 Esprits a year. Hence we need to use the opportunity to introduce other cars. And, as good as I know, to develop a front-engined GT car that doesn't require a whole amount of investment? Why miss this opportunity?"

The racing side of business

On the motorsport side, Bahar is delighted with how things have gone. While success is important, it is not yet the be-all and end-all of Lotus's involvement - because for him this is a branding exercise and about getting the Lotus name out there.

"We will not invest in television commercials because our current customers will not buy a car just because they saw a commercial on television. It is all about our cars, our products, our brand - and I see this very strongly linked with motorsport.

"We have a five-year plan for all programmes. We will be able to announce some very nice news soon regarding GP2 and GP3, and we are very serious about that side as well. I am pretty sure there will be something nice about GT cars too, which shows that we are trying to deliver what we announced and what we promised.

"I always say that we just don't want to be a sponsor and a sticker on the car. In fact, in all these categories, we are not just a sponsor - in GP2 we use our engineers as they follow the team and see what it is all about. That helps with building our engineering resources."

Berro says the motorsport focus will be narrower by 2014 © LAT

With the Le Mans project having delivered a better-than-expected seventh in class at the 24 Hours earlier this month - in only the GTE Evora's second race - there have also been signs of promise in IndyCar - as well as those podiums in F1.

Yet the huge programme, and the way Group Lotus appeared to go from almost nothing to everything, earned the same cynicism among racing people that there had been on the road car side.

Group Lotus director of motorsport Claudio Berro says that while the involvement has been extensive - it is not simply a matter of throwing endless amounts of money around.

"There are a lot of programmes, but [there is] not a lot of money!" he says, before pointing out how a mixture of partnerships with existing teams and the fact that its Evora platform is competing in many different categories at many different levels has kept costs down.

"It is important when you make one project in motorsport that you don't spend the money for one project, but you base it on different models. You have to split the costs.

"For example the T125 (track day single-seater) is one model, but the gearbox from that is ready for an LMP2 [sportscar]. And the IndyCar engine could be of interest to LMP1 teams."

There are costs coming though. Next year there will be the Lotus IndyCar engine, and for 2013 (if the teams' requests are adhered too), there will be a Lotus aerodynamic kit.

Asked if there is pressure on Lotus to start winning, Berro says: "At the moment for us, it is a similar situation to the Paris presentation for the road cars. For now, we need to go in all areas.

"I am sure at the end of the five-year plan - this is our second year - we will pick the most important focus for us. It is normal. F1 is sure. Indy is sure. GP3 is cool, but maybe I don't know. Maybe a GT focus and GT customers?"

And then there is the F1 issue. There have been complications caused by the Lotus naming row, which returned to court this week, but Bahar is not disheartened.

"F1 is doing well for us; it works for us for the time being. Should this change then the appropriate steps will be taken, but at the moment it is absolutely fine."

And of course the naming issue is a problem outside of F1 too. The confusion between green and yellow Team Lotus in F1, and the green and yellow Group Lotus efforts elsewhere confuses seasoned observers, let along the casual fans.

IndyCar is supported, while an engine programme is already underway © LAT

"Yes," says Berro when asked if it is a problem he believes is out there. "Honestly, there is some confusion. Our involvement with Lotus Renault GP is more strong and I think the people follow more and more closely this team, but it is clear that the name Team Lotus has caused some confusion.

"I think things will be clearer when we have the chassis name. We are unique in that we have the possibility to have the chassis name Lotus on the car. When the car will be with the name 'Lotus' it will be more clear."

Yet while some of the current projects may well fall by the wayside - and F1 could well be on that list if the naming issue does not reach a satisfactory conclusion for Group Lotus - there are already hints towards even further motorsport expansion too.

"We have new car for rally from GT - which I think will be launched at the Frankfurt Motor Show. It is quite new, and a good car. And it will be a good rally car for customers. And also we work for an LMP2 programme.

"In IndyCar we need to work more strong with the new engine, and the new engine needs more and more support from Lotus in America to support the team.

"I think we need to work a little bit more in America, and also we have some requests for GT racing, the American Le Mans Series and also LMP2. I think we need to develop a Lotus Motorsport base in Indianapolis for all motorsport activities in the USA."

Looking to the future

Perhaps Bahar's biggest strength when it comes to revitalising Lotus is also his biggest weakness: the company's history and the fact people care about it.

At the opening of the Hethel test track this week, it was notable that perhaps only one other manufacturer could put on a display that featured contemporary F1 cars, historic F1 cars, single seaters and sportscars on its own test venue.

Berro says: "The only other manufacturer possible to make this display is red."

It's something that new ambassador Jean Alesi has noticed - and he also has first-hand experience of life at the 'red' company after driving for Ferrari for five years.

"It is very similar especially because there is a spirit - it is not this big factory where there is a plan and everybody is going for it, and sometimes people are designing a part of the car and they don't know what they do.

"In this company it is not like that. There is a good feeling and I hope it will stay like that for long because it is like the last dinosaur, in this modern world everything changes too fast."

Alesi says there is a good feeling within the company already © sutton-images.com

Alesi admits that the proof of Bahar will be in selling the cars, but thinks that people are misplaced to think him foolish for being so bold and ambitious in his plans.

"He is ambitious, but time has to show he is right," he says. "Many times there are so many things going on and the people don't come here and see what we have seen, so they don't believe it. They think it is too much.

"But it is nice here. The circuit is finished and the cars are coming. The cars we have like the Evora are not garbage, they are updated all the time.

"And you know, what is nice compared to Ferrari - I move already around the world and there is a club, and there are people they think Lotus, and they dream Lotus. It is crazy.

"When we went to Malaysia and Japan, unfortunately there was this terrible earthquake, but I had emails from customers saying they were happy we were coming, and saying that since a boy they had the car. This mentality is in the factory. The office of Colin Chapman is the same, there is a spirit."

And it is that balancing act between Lotus past and Lotus present that Bahar's newly-appointed advisor Karl Heinz Kalbfell, a former CEO of Rolls Royce and Maserati, thinks is key to the future of the company going forward.

"The biggest fault of revitalising traditional brands like Lotus is being overwhelmed by tradition and looking back only," he says. "We need to look forward."

"Colin Chapman never looked back, so he today would also have done what Dany and team would have done. This is important for the entire direction [in which] we have to go.

"You can dream about the past, and it is important to have tradition, but the only thing that counts is the future. The DNA of Lotus is a future-orientated one."

Time has swallowed up Lotus's past. And now it's going to deliver the answer as to whether Bahar is a modern day motoring pioneer in the Chapman mould, or if he has tried to reach too far.