Lotus goes on a drive to win more diehard fans

British sports car brand associated with 007 – and more recently with ‘Red 2’ – is on a mission to expand into China

Wed, Aug 7, 2013, 12:11

From a defunct RAF runway in England’s agricultural heartland, surrounded by fields and sleepy country lanes, there is the improbable sound of super-charged sports cars. Located, as it is, far from the traditional midlands manufacturing hub, the Norfolk-based Group Lotus continues to hold a special, detached place in the imagination of the UK automotive industry.

Here, test cars scream around the track, splitting the quiet of the countryside with high-pitched engine revs, reminding the locality it is home to a hallmark of British engineering. Lotus is, after all, the car that James Bond chose to drive (twice), and the story of its foundation is as romantic a tale of British ingenuity as you will find. Colin Chapman began selling kit cars in the 1950s as a way of funding his dream of building a more luxurious, sporty product. The brand has come a long way since then, but is now fighting for survival in an increasingly competitive industry.

There are clearly two realities to Lotus: the contagious, almost geeky petrolhead enthusiasm of its engineers and staff, offset by the relentless pressures of an increasingly undermined consumer economy.

Producing just 2,000 cars a year – 85 per cent of which are exported – Lotus is a niche within a niche, and it relies on an inherent romanticism and formidable engineering to keep its foot on the gas.

“I think we have got a really unique brand position because we have got this amazing heritage,” explains Tracey Tompsett, head of PR at the company which has just announced its promotional tie-in with the Red 2 movie. “Lotus is a name that most people know and recognise. They may not necessarily know what Lotus cars are on the market today, but they have a Lotus story.”


Remaining relevant
And therein lies the potential problem. Though people may be aware of the brand, they may not necessarily be aware of what exactly it produces – an important detail for a small company with limited marketing resources that is determined to remain relevant.

Lotus was recently acquired by the Malaysian automotive conglomerate DRB-Hicom, which has ushered in a period of some investment, more efficiencies and a completely new direction (it all but scrapped a five-year plan it had unveiled in 2010). Now the number one rule at Lotus is: don’t talk about Lotus – or at least its specific future plans.

Of importance, though, is China. Next month it plans to launch the Evora S there, one of three cars, including the Exige and Elise, which are now at the centre of the brand. Each looks and performs impressively on the test track in Norwich, but in China, where brand is king, the look of a lesser name can be irrelevant.

The related luxury car market in China is booming. Launching its new Cadillac range recently, General Motors announced its ambitions to seize possession of 10 per cent of the market by 2020. Last year GM and its joint ventures sold a record 2.8 million vehicles in China, up 11.3 per cent on the previous year, and its strategy now is to introduce more than 10 new or upgraded products each year until 2016. Other brands – BMW, Audi and Mercedes among them – are also performing well. This is the scale against which Lotus and its relatively small production rate must compete. Or not.

“Selling cars into China is very complicated; there is a lot of regulation, and for a small company it can be quite prohibitive. But DRB-Hicom have acquired the distributor to shorten that process,” says Tompsett.


Under threat
Is there not a concern, however, that Lotus will be unable to protect iself from the threat of the sports car behemoths? Porsche sold more than 25,000 cars in the US alone in the year to August.

“There is always that threat; when you are a small business you are always vulnerable to that sort of thing. Why we are successful, why we are still around is because we plug a niche in the market, and what we do they are not necessarily doing. There are overlaps for sure, and they could see us as a threat and want to take us over, but I think there is so much love for Lotus that they would meet such a backlash from sports car fans.”

For now the company’s direction is to make its existing product range as versatile as possible, with the introduction of new variants to “engage a wider audience”. But there is more to Lotus than Lotuses. The company includes both Lotus Cars, the producer, and Lotus Engineering, which sells expertise and technology to third-party companies (it currently has 120 contracts, including Lotus Cars).

Small-scale production is an essential tool in demonstrating a wider capability – particularly the development of hybrid technology, weight reduction programmes and alternative powertrains.

“They go hand in hand; in order to demonstrate our engineering capabilities we need to be players in the marketplace ourselves,” says Tompsett. “The same goes for motorsport: in order to be a credible sports car manufacturer, you need to be competitive in a sports context. So it’s the same relationship.”

In this sense, the company’s recent role in developing Tesla electronic cars for the US market is of particular interest. Lotus has been working with Tesla to develop the Tesla Roadster. “If you look at the Tesla you can see there are a lot of similarities between that car and the Elise and that is because it shares some cross-over parts,” says Tompsett. “The cars would be built here at Lotus in Norfolk and shipped to California, and in California the batteries would be connected, so that is when they would become a US product.”

Making electric cars with the Lotus brand is an obvious road to go down, though quiet engines seem about as compatible with sports car brands as baby seats. Lotus, true to its culture, however, is not giving much away.

“What I can tell you is that Lotus Engineering is selling all of that so the technology is owned by Lotus, the technology is there, but it is not in road cars at the moment,” says Tompsett. “We will see what the market wants in terms of future electric Lotuses.”

And indeed, what it wants from Lotus in general.

From Bond to Bruce Willis: How Lotus sports cars stay in the picture
When James Bond hurled himself underwater in a slick white submarine-car, he not only saved the day for himself but possibly for a small English car producer too.

Think 007 cars and you can’t help but think Lotus – they provided the gadget-ridden ridden vehicles for The Spy Who Loved Me (an Esprit S1) and For Your Eyes Only (an Esprit Turbo).

In Pretty Woman, Julia Roberts decided that the Esprit “corners like it’s on rails”.

It would be unfair to suggest that Hollywood’s stardust has been the secret of Lotus’s survival, but it hasn’t hurt. This summer, the Lotus Exige S appears in the London scenes of Red 2 , starring Bruce Willis and Helen Mirren.

With restricted marketing budgets, Lotus has to think where best to capture the public imagination, according to Tracey Tompsett. “We don’t advertise in the traditional sense; we spend our marketing resources on experiential campaigns,”she says.