Lotus Raring For Revival

The new Lotus 3 Eleven.
The new Lotus 3 Eleven.

Lotus Cars will sell fewer than 100 cars in the United States and Canada this year, a long way from the 2,711 the company, based in Britain, sold at its peak in 2005. But its chief executive, Jean-Marc Gales, appears unfazed. “On cars, in 60 years the company never really made money,” Gales said, beginning an interview in his office with a touch of hand-wringing amazement. It’s a shortcoming that he intends to change.

A former president of the French Peugeot and Citroen brands and onetime worldwide head of sales for Mercedes-Benz, Gales arrived at Lotus in May 2014. Dropped into the Lotus compound — factory, executive offices and test track, all pitched among the farms and fields of rural Norfolk — Gales, a slender 49-year-old Luxembourger with a penchant for tailored suits, is tasked with changing the underdog company’s business.

The big idea, he explained, is that the company should make money on car production, rather than relying on cyclical design and engineering consultancies for profits. The Tesla Roadster, Elon Musk’s first electric car, built under contract by Lotus from 2008 to 2012, was, he said, a rare example of the company building cars with profitability. Now, Gales wants to return Lotus to its roots as a boutique maker of lightweight British sports cars. He sees his experience with major manufacturers as providing cost-saving insights on the process side of Lotus’ car-building business. Upon arriving, Gales had every part of the company’s three models — Elise, Exige and Evora — laid out in a large, brightly lit room, where the executive scrutinised each one with engineers to see if it could be made cheaper or lighter or both.

The result, he said, has been significant weight loss — lightness being an important Lotus value — and a reduction in manufacturing cost per car. Gales says he also “brought into the company many large-company processes” — like using analytics, holding meetings, having regular follow-up — “basically, what you do when you’re in a large company.” He added: “Lotus has a huge amount of potential. It always had. What was lacking was the stability of planning to move ahead and the discipline to just see things through — to make sure that what we plan, we also do it and don’t change it.”

Gales could have been making a veiled reference to the never-realised plans of his predecessor, Dany Bahar. A former Red Bull and Ferrari marketer who assumed the top job at Lotus in 2010, Bahar made headlines quickly, announcing an ambitious, if unrealistic, road map for the struggling company that included five new upmarket models in four years, with an all-new engine family. Most of them would weigh close to 4,000 pounds, or double the weight of an Elise. At the time, Lotus was owned by the Malaysian government through its state car company, Proton.

In the eyes of loyalists, Bahar had taken decades of Lotus history, rooted in the vaunted lightness of the nimble cars and their relative affordability, and set out to squash it. “Aside from reeking of hubris, Bahar’s plan would have killed the beloved Elise,” said Tony Quiroga, a senior editor at Car and Driver, whose enthusiasm was such that he once owned an example of what he termed “the feathery sports car that saved the brand.” Bahar, now president of Ares Design, a seller of custom interiors for luxury cars, did not respond to repeated requests for comment.

Liz Brooks, the head of public relations and marketing for Ares, said in an email, “The business plan with the new models had the full buy-in and support from Proton and the Malaysian government. It was presented as a joint Lotus-Proton plan, and although he was the figurehead, it had already started before he even arrived. It’s a common misconception that he drove the entire thing; it was a group decision and a group effort.” Bahar’s plan also involved delaying investment in the company’s best-selling Elise. The model became Lotus’s top model upon its introduction in 1995. With its lightweight, superstrong aluminum tub and midengine layout, it was a piece of engineering that shared an essential whiff of the weight-cheating genius found in the great Lotus race and road cars of the 1950s, ’60s and ’70s. In 2005, it spearheaded the company’s return to the US market and led to Lotus’ best sales in North America since the 1960s.

By the time Gales arrived, Lotus, now owned by a private equity firm, was in full retreat, troubled by withering sales, a shrunken workforce and a stagnant lineup. “Any carmaker launching five cars at the same time is a lot, but for a small carmaker it’s just impossible,” Gales said. “And then they weren’t Lotuses. They were big, heavy cars, as far away from the Lotus DNA as you can get.” Founded 66 years ago by the engineer and racecar driver Colin Chapman, Lotus is an unlikely survivor in the cutthroat automobile business and no stranger to hard times.

Serially undercapitalised, it built race cars before road cars (its F1 racing team was sold in recent years) and while several of its models have done well enough to keep the company out of bankruptcy, financial challenges have long dogged Lotus. Today, Gales professes that with better controls Lotus can survive and profit by sticking to its traditional formula, embodied in the Elise, Exige and Evora. “We have a niche — light sports cars that are a lot of fun to drive,” Gales said. “Why should we abandon it?” So costs have been cut. More dealers have been signed up, as American deliveries of a new Evora model, the 400, with a supercharged Toyota Camry motor capable of 400-horsepower and more, begin in February 2016. There are already 200 orders from the United States, and Gales says the first Evora droptop is expected next fall. A new Elise will come, too, he says, but not until 2018 or 2019. So the big-volume comeback, if it happens, won’t be soon.

Sales of expensive sports cars have been strong. But Lotus has never flown as high as Ferrari and Lamborghini. “Everybody wants in to this market,” Gales said of sports cars, more optimistically than others might, pointing to new cars from Alfa Romeo and Fiat. But he also confirms that partnerships with other automakers — like the old Lotus Cortina built with Ford, or the Isuzu with “Handling by Lotus” — could be an option in the future. As could a once-unthinkable notion, an oxymoron of the first order: a Lotus sport utility vehicle.

“So what would a Lotus SUV be like?” Gales asks, then, warming to his own question, answers it, suggesting that he has been thinking about it. “It’s not going to be a serious off-roader,” he said. “It’s a car where you use it in 4-wheel drive to be faster on the track.” A Lotus crossover for use on the track? His vision may not satisfy traditionalists, but the crossover will be light, Gales said, in a world that needs more lightness.