Lotus on Life Support: Could it Merge With Aston Martin?

Automobile Staff
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It was very sad to see no Lotus in Hall 5 at the recent Paris auto show, where the brand showed five different concept cars only two years ago. What is happening in Hethel? The answer: not much. With aggregate liabilities in the area of $400 million and no evident mid- to long-term strategy, the operation is slowly grinding to a halt. Instead of making money, Lotus is losing a couple of million dollars each month, and there is no savior in sight. The profit margins on the Elise, the Exige, and the Evora are simply too thin to survive on, and with the cash flow down to a mere trickle, the company is struggling to pay its suppliers, thereby creating a vicious cycle from which there currently is no escape. The evident lack of funds has virtually stalled the sole remaining new-car project, the mid-engine hybrid Esprit coupe, which was to have been powered by a brand-new V-8 co-developed with Germany’s HWA of DTM fame. The VW Group had briefly looked at Lotus, whose owners may or may not be willing to sell, but the Germans decided not to invest in another U.K. car maker, and we know that BMW is not interested either.

The were quite a few Lotus employees in Paris, and the rumor mill kept spinning for weeks after the show was over. One possible scenario that emerged is a cooperative agreement or even a merger between Lotus and Aston Martin. At first glance, it appears the two carmakers would complement each other nicely. While Aston is firmly established in the luxury segment, Lotus has earned a reputation for lightweight, fun-to-drive, and relatively affordable sports cars. Product-wise, there is no overlap. Pooling engineering, purchasing, and assembly would be difficult, but by no means impossible. All of this, however, may not be enough. Chances are that Aston and Lotus still need (together or individually) a potent automotive partner to pull through, and it is hard to judge from the outside if teaming up makes it any easier to find such a shoulder to lean on. Financial analysts claim that whoever wanted to establish a common base for Lotus and Aston Martin would have to raise between $1.1 and $1.6 billion dollars—to pay off debts, to acquire the controlling interest, and to keep the day-to-day business running. Comments an adviser who has worked for both manufacturers: “Good idea, bad timing.”

—Georg Kacher

Rotoautomobile
Yes, its sad, but I'm surprised Lotus has lasted this long. They do make some unusual and totally unique specialty cars, but I've never thought their strategy sound from a survival viewpoint. It takes more than just one type of car now days. That's all I can say.
Sideways the Seven
I hate to see Lotus circling the drain, but how long could that business plan possibly have lasted? A stagnant product portfolio with no real mainsteam car. I know they attempted this with the Evora, but it missed the mark BIG time. Maybe Tata will pick them up. They could play together with Jag and Land Rover.

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