Lotus in the post DB era

[hedgerley 439]

Because that's all there is in this review of what DRB will be announcing next week at their annual 'media retreat'. The analysts view is it confirms DRB will not be selling Lotus. 

 

http://biz.thestar.com.my/news/story.asp?file=/2013/1/7/business/12536862&sec=business

[Bibs 11,101]

There's a huge Lotus dealership opening in Malaysia tomorrow too...

[Stirling_Villeneuve 105]

...and we're all invited? 

[arbell9 21]

that mclaren has a taste of the old nsx if you ask me

 

 

 

[Bibs 11,101]

Proton confident in Lotus turnaround.

 

http://www.mysinchew.com/node/81676

[hedgerley 439]

I'm beginning to wonder if we will ever get a formal announcement of their 'turnaround plan'. It seems DRB just want to keep their heads down and work with Lotus to make it happen and we will only get these snippets as and when there is something to announce. Which is probably a good thing.

 

What little they have said has at least been reasonably positive. If they had planned to dispose of Lotus I doubt they would be investing in new stores and delaying deliveries until 'quality is right'.

 

As a member of the media posse Bibs, are you still expecting a big announcement? Or should we just be content that Lotus remains in business and not expect anything from DRB?

[Bibs 11,101]

I asked only yesterday if there was going to be any announcement as it's been 12 months shortly and was told not to expect anything. The press release from the Malaysia showroom opening is on it's way shortly but I doubt there will be anything that juicy in there tbh. 

[Buddsy 1,609]

Theres a big pic of it on the Lotus cars .co.uk webpage. First page

 

Buddsy

it comes up full page if you clear your cookies etc first

 

Buddsy

[hedgerley 439]

That does look good. They've even got an F1 car in there!  A not inconsiderable investment on what appears to be a greenfield site. Its interesting to see the DRB-Hicom name prominent under the Lotus roundel as well. That seems to indicate an aura of permanence. 

 

Coming soon after the new Italian dealers and with the Exige S hitting the road at last, I guess we should be mildly encouraged. I just need some good news on the new Esprit and I will be content....

 

http://www.lotuscars.com/gb/events/cars/malaysian-flagship-dealer-launch

Edited January 8, 2013 by hedgerley

[Stirling_Villeneuve 105]

I asked only yesterday if there was going to be any announcement as it's been 12 months shortly and was told not to expect anything. The press release from the Malaysia showroom opening is on it's way shortly but I doubt there will be anything that juicy in there tbh. 

So outside of DRB showboating in their own backyard does this really mean anything for Lotus? 

Edited January 8, 2013 by Stirling_Villeneuve

[Günter 28]

If they had planned to dispose of Lotus I doubt they would be investing in new stores ..

So the money for those stores was invested 'by Lotus' ? ..or is it more realistic to see it as investments of a group of independent dealers, who think the deal with gropulotus will run on long enough, at least for a notable turnaround in investment.

[Stirling_Villeneuve 105]

Somehow I can't see the UK dealers splashing out on new showrooms....

[richardvg 3]

Sure, but one is on southern California (Lotus) and the other is somewhere exotic (or so it looks.)

 

Matter of Money I guess.  Lotus did it first and it looks much better!

Perhaps the difference is that Mclaren will finish it off and launch it !

[Kimbers 1,766]

Saw an article in the Automotive Press saying DRB had predicted turning Lotus around in the next 2 years. I think that pretty much says what they intend to do with it......

 

Ofc companies have said that before and still sold, but from the vibes I am getting locally it does seem to point towards them getting it all under control to run it, not sell it.

[DarrylV8 225]

Good news is starting to come out now after the very quiet 2012

[hedgerley 439]

So the money for those stores was invested 'by Lotus' ? ..or is it more realistic to see it as investments of a group of independent dealers, who think the deal with gropulotus will run on long enough, at least for a notable turnaround in investment.

 

My reading of the piece, underlined by the DR-Hicom branding underneath the Lotus roundel, is that this is being done by Proton and DRB directly. I see no mention of an independent dealer. The stores in Italy are of course different but as you say this does show a commitment to Lotus by the dealer network, which is encouraging.

[Günter 28]

Mark, what I meant was more in the way of: "how can Lotus and Proton have money to invest ..if it is said that there even isn't enough money left in the pocket to pay the supliers and pay the loan in Hethel ?" -so in other words to produce more evoras, Elise & Exige/Elise V6 ..you know that the production of cars & delivery to customers was notable 'slow' (not to say 'on a stop') last year. So first step would be to pay out all bills ..after that you can create a new image and try to get on new supplier contacts & customers ?!

[Kimbers 1,766]

It was my impression that DRB made a significant investment a couple of months ago to finish the Exige, pay off suppliers and secure wages going forward. We're talking multi, multi millions.

 

However, the main issue is the massive loans and interest that the previous Management ran up. Until this gets cleared Lotus will struggle to be profitable. One of the reasons MJK made profit for the first time in 8 years (apart from the good management team and correct management of costs) was that he got Proton to clear the debts. And their debts at that time were less than a third of what DB ran up.

 

We know that MJK made £1.5 Mill, now imagine that you have a loan of £300 mill at ...I dunno, lets be kind.....3%. Annual Interest alone is £9 million!!! Without paying any debts back!  I know this is very simplified BTW, but it gives you an idea of the hill they have to climb.

[hedgerley 439]

Mark, what I meant was more in the way of: "how can Lotus and Proton have money to invest ..if it is said that there even isn't enough money left in the pocket to pay the supliers and pay the loan in Hethel ?" -so in other words to produce more evoras, Elise & Exige/Elise V6 ..you know that the production of cars & delivery to customers was notable 'slow' (not to say 'on a stop') last year. So first step would be to pay out all bills ..after that you can create a new image and try to get on new supplier contacts & customers ?!

 

That was true 6-9 months ago Gunther but as we know production resumed fully late summer and, notwithstanding the delays in Exige S deliveries 'to get the quality right' I think Lotus are or will shortly be operating BAU under whatever plan DRB has agreed with the bankers.

 

Speaking of which, I seriously doubt DRB/Proton/Lotus would have been allowed to invest in these new facilities nor would they have been able to get production going without the agreement of the banks and payments to suppliers. As Kimbers suggests, a deal has probably been done and supply contracts brought up to date.

 

We should all rejoice at this sliver of good news!

[hedgerley 439]

Lotus results made the Sunday Times today. Not sure what to say...

 

Edited January 13, 2013 by hedgerley

[cnapan 4]

However, the main issue is the massive loans and interest that the previous Management ran up. Until this gets cleared Lotus will struggle to be profitable. One of the reasons MJK made profit for the first time in 8 years (apart from the good management team and correct management of costs) was that he got Proton to clear the debts. And their debts at that time were less than a third of what DB ran up.

 

This got me scratching my head. I thought that Lotus had managed to secure 500 million in investment to fund the new cars?

 

Did they use this all up and then start borrowing? I doubt it.

 

I wonder if what happened is that the money was promised, the plan got under way, then the investment didn't materialise after all, or dried up mid-stream. I suppose what we'd see then is the management desperately trying to borrow in the short term on the basis that the promised money would eventually appear. Who would lend them money otherwise?

 

 

If you're a company with a small range of product with a tiny niche appeal and a track record going back decades of making loss after loss most years, with insignificant amounts of profit at best which doesn't add up to enough to fund major projects, then there's no alternative to securing significant investment to shake things up. Saving up pennies in the piggy bank isn't going to help, especially when you have such a vulnerable business in the first place.

 

 

Lotus has found itself owned by people who I don't think have the financial muscle to inject what is required to kick the business up to the next level. 

 

My hope is that they'll sell it to someone who has, but perhaps their plan is simply to cut costs, get some insignificant profitability, then hope that suddenly thousands of new lotus buyers will materialise out of thin air with the current product lineup.

 

Can't see this happening myself.

[Stirling_Villeneuve 105]

Interesting though... As I read elsewhere ' Lotus could be scaled down to become the new Morgan, meanwhile Caterham with the help of Renault expand to become new Lotus'. 

 

Going back to the Sunday Times article, did Lotus really sell 1043 cars in 2012?  

[Bibs 11,101]

That's accurate. Remember the UK figures we see so often are a small market for Lotus, they sell 3/4 times more just to Japan for example.

[V8 FOU 0]

What I find worrying is that we have seen so many companies being bought either by "investment" banks or in smaller instances MBO's (Comet /Jessops) nad they all lurch from one re-financing crisis to the next disaster.

Make no mistake, the DB legacy of debt is HUGE. All his profligate activities and lavish lifestyle......

As stated above, Lotus cannot service this size of debt without DRB paying it off, or at least part, and getting some of it written off.

 

We are all getting severe cramp with having everything crossed for so long.......

[Günter 28]

just a moment -see ..this is old numbers, as Mark suggests in his prior post  "..Günter , it was true 6-9 month ago.."

 

The article notes "a loss in the year to March 31, 2012.."  -so it is just the numbers for the bussiness year '11 to the '12 season.

 

With the time as the production was on a halt inbetwen this period of time ..right ?

 

The finance help to restart production was pumped into the company to pay out the suppliers & stuff ..and let it run again in summer, of course still with a loss .  So it will be interesting to see the numbers for the '12 to '13 season, with the actual effect of the restart