Lotus stays in the red, Gales eyes break-even in 2016
Although the ongoing losses make for uncomfortable reading according to documents filed at Companies House for the year ending 31 March 2014, this figure is less than half the £168m lost in the previous 12 months.
The Malaysian-owned Norfolk car maker, which is being restructured under new chief executive Jean-Marc Gales, blamed the loss in its annual report on “weak market conditions, fragile consumer confidence, increased competition and cost pressures”, Car magazine reported.
Gales told the magazine he was confident the turnaround would reach an operational break-even point as soon as 2016.
“It’s better than the year before but far from good,” said Gales, who announced staff cuts of 325 in September. “… our goal is to make Lotus a company that is self-sustaining, with positive operational cash flow, that is my very precise target for next financial year, that starts 1 April 2015 and runs to March 2016.”
The company report filed this month reveals that the Lotus Cars wing actually saw revenues from car making rise by 1 percent to £69m in the last year.
However, Lotus Engineering – traditionally the cash cow at Hethel – saw revenues collapse by 43 percent in the financial year, down to £13m.
The filing at Companies House blamed “an internal refocusing of engineering resources to strengthen Lotus product, including quality improvements”.
The numbers are looking better for the 2015 financial year, however.
In the first eight months from April 2014, Lotus sold 1448 cars – up 55 percent on the previous period. That’s the best Lotus sales performance since the boom years of 2008. Hethel is confident it will sell 2000 by the end of March 2015.
Gales said he is planning to divert some of the expertise at Lotus Engineering to make Lotus’ own cars better.
“The best advertising for Lotus Engineering is the quality, handling and performance of the cars, and this is first priority.”
That mission starts with the new Evora range expected at the 2015 Geneva motor show. To widen its appeal, Car said Lotus is even exploring a jacked-up Evora “Allroad” style crossover.
Two months ago, Gales said Lotus may have to start building front-engined vehicles using parts from Malaysian parent company Proton to stay afloat.
Speaking with Car & Driver magazine, Gales said the brand would be working closely with the Malaysian company for its vehicle development by the end of the decade.
“If we’re looking at four to six years in the future then our partner is Proton,” he said.
“Proton is a volume manufacturer and has parts modules that we could use for future models.”