Lotus to cut up to 200 jobs in the UK

[Hethel Merman]

Geely own part of Mercedes so maybe that explains the AMG decision.

 

[Tomwa]

It must have been a bit liberating at Lotus to be given budgets to build cars after limping along and only doing revisions of the Evora under Proton.

But yeah, it feels like the Eletre and Emeya may have been pushed across the table at them, rather than Lotus team pitching something and given approval.

I'd love to see Lotus be a "volume" manufacturer, but I just don't think it's possible. They don't have the facilities for it, and it would be incredibly difficult to scale from "some interest" to "140,000 cars a year".

Geely/Volvo/Polestar presents an opportunity, that some of the bigger facilities could transition. They start doing 1,300 cars...then interest grows and they decide to push 2,600 cars...then 7,000 cars. For Geely's part unless they build new facilities it will always be a bit of cannibalizing, unless you just massively overbuild your factory hoping you'll need the extra capacity later.

 

[Eagle7]

It must have been a bit liberating at Lotus to be given budgets to build cars after limping along and only doing revisions of the Evora under Proton.

But yeah, it feels like the Eletre and Emeya may have been pushed across the table at them, rather than Lotus team pitching something and given approval.

I'd love to see Lotus be a "volume" manufacturer, but I just don't think it's possible. They don't have the facilities for it, and it would be incredibly difficult to scale from "some interest" to "140,000 cars a year".

Geely/Volvo/Polestar presents an opportunity, that some of the bigger facilities could transition. They start doing 1,300 cars...then interest grows and they decide to push 2,600 cars...then 7,000 cars. For Geely's part unless they build new facilities it will always be a bit of cannibalizing, unless you just massively overbuild your factory hoping you'll need the extra capacity later.

Before they do anything else, they need to greatly expand the dealer/service presence. Maybe partner with Volvo in that regard. The problem they have now is, the incoming U.S. administration is going to put a 100% tariff on Chinese imports, so that pretty much kills the vehicles coming out of Lotus Wuhan for being successful in the U.S. At least the ones they have now. If they could design and produce a small affordable hatchback, that might have a chance, but they don't seem to want to be in that space, unless they decided to build a factory in the U.S..

The luxury market is just too competitive, and not a good segment to try and compete in right now. Lotus should aim for the middle. Beautiful designs and styles, not too fancy, less of the costly and mostly unnecessary tech, reasonably priced. That would get them into volume production and allow them to grow the brand. AS LONG AS they have a reasonable number of dealer locations.

 

[Tomwa]

I just don't think anyone would buy a small hatchback from Lotus.

It's not part of the brands identity, so why would anyone who is a Lotus fan buy one? For people who are just shopping small hatchback cars...why buy Lotus over Kia, Ford, VW, Toyota, etc? What's the value? Racing stuff? Proven or just in name/brand? You target competition with Hyundai N line cars (which while higher volume than Lotus is still Niche and up market).

You go pseudo luxury/performance? So you target smaller Audi cars? Merc GLA?

Again who is buying? Why do they buy? Few people will buy it just because it exists.

 

[Honcho]

I have no idea on the numbers but for the survival of the brand it's probably best they reuse their other Geely developed EV platforms as much as possible to keep costs down and maximise profit and sales. Hopefully with a steady income then they can keep pushing development money into the type are cars Lotus are famous for. I hate seeing comments about cars like the Electra "it's not a Lotus". ...well it is, and all the bitching about it only harms the potential development of any new more driver orientated cars. The brand needs to get money from somewhere and marketing SUV type vehicles is a proven way to do that.

 

[seriously]

Might satisfy the worlds desire for smaller displacement engines.

For myself it was the decision maker to purchase. AMG engines are high-end engines that are; and have been shoved into semi-exotic cars over the years, makes for nice talking point 'AMG turbo with DTC'. Whenever youre at a show or talking with gear heads they want to talk about drivetrain.

Also I'm a bit biased, four of my cars are AMG....

They need a 4cylinder to sell in some Asian markets where there is a significant markup for higher cylinder counts. Especially in China. Since geely, Mercedes connection, Chinese market, this move totally makes sense. I’m guessing the AMG engine is more expensive than the supercharged v6 for lotus to manufacture/procure.

 

[Lotustoronto]

There has been a lot of talk about Lotus being a volume manufacturer and being placed alongside Volvo on in their dealer network. While I agree the dealer network in the US would be great to see it expand, it would not be as big as Volvo's. As an example Volvo sold around 100K vehicles in US/CAN and 145K of vehicles in China. Annual Volvo sales is around 700K. Lotus is not the realm of being that size or kind of company.

As for production capacity.... it has already been built. -
Normal customers (not auto enthusiasts) would buy a Lotus SUV if marketed properly and if it is a good product in general. ( I think Lotus does fairly good marketing, but like all things Lotus, could be better) They are obviously pricing in the Porsche category for its SUVs and Lifestyle EV's. Which is apart of the market that does not have a lot of competition. Used to be Alfa Romeo/Maserati territory before they got bought by Stellantis. Really Porsche (SUV's and EV's) sit alone in their market space, with no other brand with racing heritage competes with them. Tell me another brand that has pricing in the Porsche range, European, Racing Heritage (good for sporty marketing) that is building EV Cars and SUV's and has a worldwide dealer network (albeit a small one)? No one at the moment.

I think Lotus in North America (due to Tariffs) will be under some pressure, as selling cars here is not financially feasible. However, if they begin to take off well in the Chinese market, the chances of building an EU plant begins to increase. We are a few years away of finding out the fate of Lotus yet, but I think they are on the best path for success.

 

[Eagle7]

I just don't think anyone would buy a small hatchback from Lotus.

It's not part of the brands identity, so why would anyone who is a Lotus fan buy one? For people who are just shopping small hatchback cars...why buy Lotus over Kia, Ford, VW, Toyota, etc? What's the value? Racing stuff? Proven or just in name/brand? You target competition with Hyundai N line cars (which while higher volume than Lotus is still Niche and up market).

You go pseudo luxury/performance? So you target smaller Audi cars? Merc GLA?

Again who is buying? Why do they buy? Few people will buy it just because it exists.

It would depend on what it looks like (looks sell), what it does, and how much it costs. Just look at the Emira. Let's face it; the number one reason it's gotten the attention it has is because of its looks. A stunning Carr designed hot hatch might do better than you think.

A big heavy electric SUV isn't part of the brand's identity either, but they made one.

Right now I think the biggest pressure point everybody is facing is price. Vehicles have just gotten too expensive, and even if you can stretch to buy the vehicle, insurance costs can kill the affordability.

Lotus has to do something, and something they can afford to do and customers can afford to buy. Right now a gorgeous, affordable hot hatch with reasonable insurance costs would sell I think, regardless of who makes it. Might as well be Lotus.

 

[Tomwa]

You have to consider experience, trust/reputation, manufacturing, supply chain and parts availability, and of course cost.

I just think you are wrong, people care about brands. They won't buy a Lotus that will loudly talked about being a badge engineered Chinese car if it isn't good. You are taking for granted that it would be. Despite Lotus having no experience with this kind of car and the volume of sales to make it worthwhile since to compete it will have to have very narrow margins.

Honestly. Best thing for Lotus is for an automotive "group" to own them and understand their purpose. One part of the business pumps out middling economy cars that sell in big numbers and they inject money into Lotus knowing they may not be the most profitable. Maybe you tap them for engineering or design resources because it inspires and attracts passionate talented people. But you don't ask those same passionate people to recreate the Prius "but with legendary Lotus handling"

 

[Nick in Sydney]

But yeah, it feels like the Eletre and Emeya may have been pushed across the table at them, rather than Lotus team pitching something and given approval.

Lotus has been operating as two separate businesses: Lotus Cars in Hethel and Lotus Technology in China/Germany/Coventry. Lotus Technology doesn't even own Lotus Cars (they have an option to acquire it).

Eletre and Emeya were conceived and designed by Lotus Technology with very little input at all from the Hethel team. I'm sure the guys in Hethel were shaking their heads and thinking "imagine what we could have done with that budget".

 

[Nick in Sydney]

Honestly. Best thing for Lotus is for an automotive "group" to own them and understand their purpose.

Isn't that exactly their current situation? While Lotus Technology has listed on the NASDAQ, Geely is still effectively in control. Geely is providing the loans and they share Geely components from Volvo, Lynk, etc. Also, I believe Geely actually own the China factory and are operating it on behalf of Lotus Tech.

If Lotus goes tits up, Geely will fold the factory and German engineering team into their broader EV business. To be more optimistic, perhaps Geely could establish a US EV factory to be shared by Lotus, Volvo and other group companies.

 

[Tomwa]

I think the difference is, most people here seem to be under the impression, especially given the 200 positions cut from Hethel, that there is pressure for Lotus cars to start turning a profit. Which is where everyone is adding their thoughts on how that could be done.

I think the concern is. After buyin Lotus it has turned into a failed venture to produce cars that prevent constant cash flow from Geely to support. Which at some point will result in Geely closing up Lotus and not even bothering to badge cars that have little to nothing to do with Lotus but still carrying a badge to make use of the recognition.

Who knows if that's remotely likely, but jobs cut from Hethel isnt a good sign.

 

[Lotustoronto]

All of Lotus' current line up are not exactly economy cars... we are talking about 150K sports cars and SUV's. If they hit 12K sales by the end of the year, while not ground breaking - would still be very positive. I am sure the US/EU tariff's are a huge blow to profitability and sales. If you work it out that is approx. 50 cars per dealer. (250ish dealers worldwide) Now remove the 50 or so North American dealers since they can not sell the EV's due to tariff's and that is a fairly decent amount of sales for low volume premium British brand. As a comparison - Aston Martin has 160 car dealers world wide and moves around 6,500 units world wide. I think we need to give Lotus a little more credit - there are growing pains going on, no question.

The 200 job loss is not great news. Neither was loosing Simon Lane the head of Lotus Advanced Performance Division (LAPD) - responsible for Evija and Emira GT4 projects. That happened last week. Writing is on the wall that something is going on. Perhaps it is a good thing and we will start to see improvements instead of old Lotus problems. Until we see the sales trajectory going down on Lotus as a whole (not just Hethel) I think Geely will keep it going.

 

[CarrHarris]

Two things are killing the market right now. One is price, and the other is too much tech in vehicles which is partly why they're so expensive. I watched Harry's latest video where he talks about how prices are pushing things out of sight, even for people with money. It's not only the initial cost, it's the insurance and maintenance that goes along with it. If the affluent are feeling that pinch, it's no wonder sales are down so badly across the board.

The other issue is too much tech in cars. Most people don't use even half of what their cars have, and a lot of people just turn things off. It's too distracting, and takes too much time to sit there and futz around with menus trying to do something simple, like find out where the seat heater is and how to turn it on or off. How many people even know what all the tech in their car is and what it's for?

In addition to "add lightness", Lotus should go for "add simpleness". Make cars light and simple to use again. Simple, obvious analog controls for the typical things people want to turn on/off adjust. No menus. Just as adding lightness improves performance and reduces wear and tear, adding simpleness reduces frustration, complexity and cost.

I know screens are taking over the entire dashboard now, and that's all sci-fi futuristic, but is any thought being given to what happens in the future with trying to service that? If the screen malfunctions you're dead in the water. No information and no controls. Go back to analog gauges or at least separate gauges that give you the information you need quickly and easily. Imagine 20 years from now trying to restore a car that's using screen and computer technology that's been obsolete for years. Everything being built today is nothing but a massive future junkyard of useless, unfixable and unserviceable junk.

Lotus can succeed, but they have to do it by leading, not by following or trying to compete with the big players. Do what Steve Jobs did when he brought Apple back from the dead. He didn't spend time looking at or worrying about Microsoft, he focused everybody to start focusing on making one great product, "Let's make a great computer" he said. Once that attitude and mentality got focused, he then used that to create other things that solved other frustrations that people were dealing with, including customer service. Lotus should be asking themselves: "What frustrates me as a vehicle owner and user? What would I love to see or have that I don't right now? What do I need that's not available?" instead of asking themselves what Porsche or somebody else is doing.

LOTUS...you have a great sports car; improve it. Create a system of online interactivity with physical locations that have one show car, where people can see and touch the actual product, then sit down there with a sales specialist and order it through a visual interactive online system. Create a depot/service system where cars can be shipped from the factory, that does all pdi and prepares them for the customer. Any issues found are fixed there so they don't get to the customer. Make a great system, not just a great car. In the U.S., have one of these depots on the west coast, one in the mid-west, and one on the east coast. Make distribution to the customer easy and reasonable. Have many of the small, physical showroom locations as outlined above all over the country; no vehicle inventory, just an interactive showcase. They should also be service locations. Make it the equivalent of the iPod and iTunes/app store. Have all available accessories and options from Lotus as well as factory-approved 3rd parties there, so customers can sit down and browse and buy. That's the inventory they need there. How many owners would love to be able to go to a center like this and buy intakes, exhaust, wheels, CF options, etc. and either walk out with them, or have them installed right there. Talk about a money maker.

The old automobile business model is dead or dying, just as the old computer business model was when Steve Jobs reinvented Apple. Learn from that. Do what he did. The first company that figures that out, is going to become the next Apple of the automobile world.

I think Audi' have some of the better interiors, and they have buttons for the HVAC controls and simple radio controls and other items which are on/off functions this makes sense and is easier to deal with when driving.

 

[Speedy Emira]

I think Audi' have some of the better interiors, and they have buttons for the HVAC controls and simple radio controls and other items which are on/off functions this makes sense and is easier to deal with when driving.

I understand why they bought the AMG engine if they own part of Merc but it's a shame they weren't linked to Audi and could have bought the 5 cylinder engine with manual or DCT options. There would have been no need for 2 engine options and other brands like the KTM with a 530hp model:


It would fit because JUBU can supply the Audi DQ500 gearbox as a DCT option which is the same as the above and therefore must have the correct orientation.
My guess is they stop producing the V6 to save costs and simplify the production line.

 

[RPM]

Tell me another brand that has pricing in the Porsche range, European, Racing Heritage (good for sporty marketing) that is building EV Cars and SUV's and has a worldwide dealer network (albeit a small one)? No one at the moment.

BMW? Audi?

 

[JimBo1953]

They just need to keep making cars like the emira.

Agreed. Mostly. They need to keep making cars like the Emira - only better. No bubbling body panels. No dodgy Chinese electronics. Better parts availability. Example… my cars going to the body shop to have the front bumper replaced having been damaged by a careless third party. Readily available? No chance. The repairer spent an hour on the phone trying to track one down. Eventually, they found one. ONE! Seemingly, the only available bumper in the U.K. Not good enough. Its situations like this that cause real damage to their reputation.

 

[Lotustoronto]

BMW? Audi?

I think from a brand perspective; Porsche > BMW, Audi and Merc

If I had to place Lotus in a brand ranking - in terms of prestige, pedigree and sporting history it would look like this;

1. Ferrari, Lambo, Mclaren, Aston Martin
2. Porsche, Maserati, Lotus
3. BMW, Audi, Merc (used to be Alfa in here as well)

Nonetheless I get the point that the Eletre would be crossed shop by BMW/Audi/Merc products as well.

 

[Six Speed Stephen]

Agreed. Mostly. They need to keep making cars like the Emira - only better. No bubbling body panels. No dodgy Chinese electronics. Better parts availability. Example… my cars going to the body shop to have the front bumper replaced having been damaged by a careless third party. Readily available? No chance. The repairer spent an hour on the phone trying to track one down. Eventually, they found one. ONE! Seemingly, the only available bumper in the U.K. Not good enough. Its situations like this that cause real damage to their reputation.

The parts are so unavailable for the Emira, that when my body shop went to get a quote, Lotus didn't even have parts numbers for them.

 

[ameeriklane]

I agree the AMG engine probably wasn't part of the original plan, although I still found it an odd choice considering the Emira was supposed to be a relatively short-lived production with a definite EOL, to be replaced by the Type 135. Since Lotus already had a manual and auto option for the V6, I honestly don't see why they needed to use the AMG engine.

Taxes. Or at least that is what they told me at the factory tour. Some countries tax engines in such a way that the V6 engine would increase the price of the car by more than 50%. The AMG 4 cylinder was a way to keep the price reasonable in those markets.