Cancellations up the queue

[Scrute]

So I had a call from customer services this morning saying my end of July 2021 reservation is a December 2022 build slot but that they had a cancellation and we’re inviting me to move forward to August!! 
 

I have no idea what the criteria was for choosing the people to bump but I actually declined as the only things the same on the config were interior colour and exterior paint colour. Pretty much every other option was different. I expect people have spent as much time as I did agonising over the final configurations.

Still, it pains me to have passed up an opportunity to take delivery four months earlier but hey it’s worth the wait for what you want! And the lady on the phone seemed surprised that I didn’t agree on the spot! Someone else looking for a Seneca, full black pack, gloss black wheels and red interior will be the lucky winner I guess! They wouldn’t change anything on that config either, everything is locked now.
 

It was nice to know I’m still in the plan 2022 (just) - based on others’ best guesses on here people are being led to believe they’re January or into February. 

[TomE]

I’ve heard of a handful of others being given a similar opportunity this week.

Customer Care seem to have had to work a long way down the queue on some of them, for exactly the reason you highlight of only a partial match to people’s spec and no option to change.

[Scrute]

It must be a nightmare for them, taking that car out of the build plan, vs. bubbling the entire queue up to avoid changing the plans. Surely if you move one person forwards that leaves a gap on their vehicle to be filled again further down. 
Tricky business!

[390ja]

It will probably be snapped up by someone, but if not, maybe we’ll see some demonstrators appearing…

hope so, I’m still very torn on whether to continue my order.

[Spinney]

So what happens if nobody they contact wants the spec of the cancelled order? As it’s not due to enter it’s build slot until August, I find it hard to believe they can’t adjust the spec this far ahead! 🤷‍♂️

[tailslides]

Had a call today with the chance of an earlier delivery, specification is similar apart from this car has sports suspension, tracker and no privacy glass.

Sadly we will have to pass up on the option, our car should arrive in November and this offer was probably September.  We have a long delayed trip around Europe for most of September and a Northumberland driving week shortly after, so in reality, we won't be able to take delivery until mid October at the earliest, now, if it had been July...

Edited May 10 by tailslides

[Scrute]

They said on the phone that “the factory” just refuses any customer services requests to change any specs in the queue. 
It sounded like a cop-out but that’s their stance. 

[mg4lotus]

Perhaps they are already built and sitting in a warehouse somewhere?

[Eagle7]

The parts to build a particular spec car have to be ordered in advance, and Lotus has to commit to paying for everything before being paid by the customer.  They're not ordering by ones and twos, they're scheduling builds according to type, and have to commit to that quantity of everything because the suppliers they're ordering from have to do the same thing.  All the employees involved get paid to produce the parts and assemblies, then everybody gets paid to put it all together into the final product, and Lotus has to commit to pay for all that up front before the customer pays them.  This is a big financial commitment for Lotus.

There's a point where trying to change your spec cannot be done because they're too far along in the process.  Whatever it is you want to change has already been ordered in the batch necessary for that production run.  Whatever you want to change it to, has NOT been ordered, and they don't order by ones and twos.  This is the JIT or Just In Time manufacturing process that manufacturers have been using for decades, it was pioneered by the Japanese I believe.  Manufacturers no longer order large numbers of parts that sit in warehouses, and may or may not be needed right away.  They order what they know they're going to need, just in time for production.  This minimizes the costs of inventory and warehousing, but the downside is it's more fragile to disruptions in the supply chain, which is why manufacturing everywhere is struggling right now.

Nobody wants cars to be built and delivered more than Lotus right now, but fortunately we're hearing that they aren't going to compromise quality just to rush cars out the door.  This is a good thing for us.  We want them to get it right, and that's what they're focused on too.  We just need to be patient.

[Mctaff]

I’d imagine there’s a fair bit of wiggle room in terms of multiple people wanting in effect to swap options - let’s be honest there aren’t many choices! - thus cancelling out upstream ordering implications. But computer says no minimises any risk for lotus

Edited May 11 by Mctaff

[Eagle7]

Once production is underway and everything is running smoothly, there might be a bit more flexibility in making slight changes because the entire supply chain is now up and running, and everyone always has a bit more ready to go in anticipation of the next order/delivery.  At this stage though, it's a first for everything so there's no backlog of supply or over-runs.  For Lotus everything is on the line right now.  At the moment, they don't have anything being produced, sold and bringing in money, so everything has to be managed carefully until they do.

[mg4lotus]

"Just in time" process? No items are kept in stock, no warehousing costs. All components are ordered to arrive "just in time" for the build.

A bit extreme if it comes to things like paint colours, or being able to adjust build lists. Surely there must be spares available as people will eventually need spares for repairs and maintenance etc.

[Bibs]

It's how most major manufacturers of anything build most things nowadays. Of course they have a few spares, but not warehouses full of parts waiting to be used, they're ordered to arrive 'just in time' for the car which requires the part.

This is also just for manufacturing, aftersales have a completely different team of buyers, their own warehouses, distribution, sales teams etc. 

[Eagle7]

2 hours ago, mg4lotus said:

"Just in time" process? No items are kept in stock, no warehousing costs. All components are ordered to arrive "just in time" for the build.

A bit extreme if it comes to things like paint colours, or being able to adjust build lists. Surely there must be spares available as people will eventually need spares for repairs and maintenance etc.

Once production runs have been completed, and especially if it's an ongoing order, then suppliers will have a small amount of over-runs available for order changes, but right now everything is happening for the first time for Lotus and their entire supply chain.  There's always a certain amount ordered extra specifically for things like repairs, maintenance, build issues, etc., but those won't be available until full production is underway.

I know everyone is antsy to get their cars, and they want this all to be like other companies who've been doing this for years, but at this particular time, this is a huge first in a lot of ways for Lotus.  We're all pioneers along with them right now, so we just have to be patient.  We'll be rewarded with great cars at a price they'll probably never be at again.

[tailslides]

3 hours ago, mg4lotus said:

"Just in time" process? No items are kept in stock, no warehousing costs. All components are ordered to arrive "just in time" for the build.

A bit extreme if it comes to things like paint colours, or being able to adjust build lists. Surely there must be spares available as people will eventually need spares for repairs and maintenance etc.

That's not quite how just in time works, items need to be delivered to the production point in a suitable time frame, they will be shipped in larger quantities to the production plant. The slightest hiccup can be problematic however.

From my conversation with Lotus, my opinion is they wanted me to do them the favour of taking a car they didn't have a buyer for, it also seemed I would be paying a premium for extras I didn't want.

They would have had a better response by either swapping the components, in my case it was sports suspension, or offering an incentive to help them out of a pickle.

Maybe the next person in line will have been more open to accepting a change in specification but there needs to be some flexibility on cars that haven't even been built.

[duncx]

It may not be in their 'grand scheme' to do this but Lotus could send any cancelled order cars to the dealerships - I have no doubt that they would be snapped up immediately by eager buyers.

[Eagle7]

Depends on what the spec is.  If it's a U.S. spec, yes any dealer in the U.S. would be able to sell it immediately.  If it's a U.K. spec, customers buy from Lotus directly so they would have to find somebody who is either willing to change from their spec and accept this other one, or just wait until somebody orders one like it, or just build it and try and sell it.  That's the downside of the factory-direct sales model, the factory becomes the dealer and is now subject to those kinds of issues.  Although honestly, right now considering the demand, I don't see them having a problem selling any Emira they can produce.

[MJON]

@Eagle7? We do still have Lotus dealers in UK, so very easy to lay off any cancellations to be sold via the network. If they were to apply first registration, maybe add some miles, with the current used market they could then sell on at a premium over list. Not sure how Lotus would feel about it but see several Porsche dealerships at it. 😏

[Graham Ridgway]

But can you imagine the uproar if that happened?  A few cars arriving in dealers - the people who are queuing for their cars would go nuts!  Also Lotus are selling new cars direct, not via dealers.  Won't happen!

I imagine when push comes to shove and people have to finally commit and pay, there could well be a lot of cancellations as the world will look very different in June/July/Aug this year than it did May/June last year.  Covid accumulated cash gone, used car market stagnant, inflation predicted at 10% (BoE).

Let's hope Lotus have a plan and their idea to limit the spec variations with the FE works for them and demand doesn't evaporate.  I will definitely be weaker though, probably much weaker.