A little dose of reality
The Lotus Group has just revealed its latest accounts for 2009-2010 and while turnover has risen by 26 percent to $225 million, thanks to the sales of the new Evora model, the company posted losses of $18.2 million. This was better than the previous year when the company lost $28 million. The company is now embarked on a scheme to lift production from the current 2,700 cars a year to around 8,000 in the next five years. The company is hoping for $64 million in government loans, saying that the increased production will create 1,000 new jobs in the Norwich area and is threatening to move production out of Britain if the application is turned down.
Datuk Syed Zainal Abidin, the boss of Lotus’s parent company Proton, confirmed this week that the financing would be coming from bank loans and that talks were taking place with a number of banks, including the Commerce International Merchant Bankers Berhad (CIMB) for a $700 million loan, which will be needed to find the Lotus project.
“Group Lotus by itself cannot raise that kind of money and that is why Proton has to come in as the entire five-year turnaround exercise has to benefit the whole group,” Zainal said. “We hope to sign an agreement for the loan within the next month as we are in talks with several banks including our own banker CIMB. We are confident we can turn around Group Lotus as we have five new Lotus models that will start production by 2012.”
Zainal said that Group Lotus would need to sell at least 8,000 units of the five new models each year before it could show a profit.
The plans announced thus far have been greeted with scepticism in the automotive world – and in motorsport where Lotus is trying to make a big impression.
“It is a do-able plan,” Zainal said. “We have thought through this plan a hundred times and it is a challenge but realistic.”