In a brand new office building a stone’s walk from Frankfurt Airport, receptionists turn on the illuminated Lotus logo for the first time, and workers put the finishing touches on the entrance while crowds of Italians, Portuguese and Germans walk through.
Observers say the language mix reflects the effectiveness of Lotus’ recruitment drive among carmakers, car suppliers and Formula One racing teams across Europe and Brazil.
Four years after Zhejiang Geely Holding Group acquired a controlling stake in UK-based sports car maker Lotus from Malaysian conglomerate DRB-Hicom, Geely is completing a Lotus Tech Innovation Center in the small German town of Raunheim, run by about 150 engineers from more than 15 be manned. countries.
Engineers and other staff were snatched from carmakers such as Porsche, Audi, Ferrari, McLaren, Aston Martin, Mercedes and Opel, as well as suppliers such as Continental, Hella, Faurecia and Bosch. The goal is to grab market share in the premium segment of Porsche.
Lotus sales have fluctuated around 1,500 cars a year over the past few years, and its existing combustion-driven fleet is about to end its sales life. Now the Raunheim team is tasked with transforming the brand into an electric vehicle (EV) one. Contrary to what might be expected, the team’s first model will not be the typical two-seater sports car historically associated with Lotus, but a crossover SUV tentatively called the Type 132.
The new Lotus is expected to enter the Chinese market next year, before moving to North America and Europe. A Rmb8 billion ($ 1.3 billion) plant is being built in the central Chinese city of Wuhan to turn the car around. Given that Lotus’ latest UK plant in Hethel, Norfolk, has a capacity of 1,500 cars per year, the Wuhan facility’s projected capacity of 150,000 indicates a decisive shift in the company’s manufacturing power to China.
Encouraging this idea, Lotus announced in August that a new division, Lotus Technology, had opened its global headquarters in Wuhan. The division will be responsible for the “integration of a new generation of lifestyle products”, while the UK-based Lotus team will be responsible for the development and manufacture of sports cars, among other things. Li Bin, founder of Chinese EV manufacturer Nio, has invested an unknown amount in Lotus Tech. The funding valued the unit at about Rmb15 billion. Malaysia’s Ethics Automotive remains the minority shareholder in Lotus Cars.
This article is from Nikkei Asia, a global publication with a unique Asian perspective on politics, economics, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 division provides in-depth coverage of 300 of the largest and fastest growing listed companies from 11 economies outside Japan.
“Lotus has always been manufactured only in small group sizes, but we will change that and take Porsche into the premium segment with cars that still have all the sports car features, while being safe and comfortable enough to take one’s children to kindergarten. Flavio Friesen, a senior chief engineer who joined Geely in 2018 after working for Volkswagen do Brasil, General Motors and Opel, told Nikkei Asia.
“We will expand Lotus’ portfolio of sports cars to sports utility vehicles and sedans by adequately transferring Lotus’ traditional strengths, such as extremely fast aerodynamics and innovative lightweight materials, as found in Lotus’ Elise, a sports car weighing less than 1,000 kg. [of] weight is perfect fun on winding rural roads, ”he added.
The Emira, Lotus’ last petrol-powered car, will start rolling off the line in Hethel next spring.
Meanwhile, the Type 132 turned in test laps at the nearby Nürburgring F1 racetrack. In early November, Lotus released a cryptic PR video clip titled “Breathe” showing a Type 132 grille shutter that moves as if inhaling and exhaling. Geely seems to be taking its cues from Porsche, which last year shipped nearly 90,000 cars to customers in China, making it the largest single market for the German carmaker and a major contributor to the global profits of its parent company, VW, represent.
“The Chinese customer traditionally expects more comfort in the back seat than in the driver’s seat, but we at Lotus remain committed to building cars for the driver,” said Ralph Stenger, Lotus’ senior chief engineer, who joined the Geely Group in 2019. has and has previously worked for GM, Opel and PSA.
“We will be selling different versions in China and the other markets, and the cars will have mechatronic systems that will allow you to push a button to change from an urban mode to a noisy rural driving mode,” Stenger added.
Geely already has “boots on the ground” on the continent through its ownership of European brands, including Volvo Cars and London EV, formerly London Taxi. Geely is also the largest shareholder in Daimler, with a stake of slightly less than 10 percent, and now owns the Smart brand together with the German carmaker.
Observers see potential in Lotus. Tu Le, managing director of Shanghai-based Sino Auto Insights, believes it is possible that Lotus could increase its sales enough within the next few years to push the Wuhan plant to its annual capacity. Tu emphasized Geely’s success in reversing Volvo’s fate after buying the faded brand from Ford in 2010.
“Volvo has never sold more cars in its history. [It] has created a new brand, Polestar, and recently went public at a valuation of $ 23 billion, compared to [with] the $ 1.8 billion that Ford Volvo sold to Geely, ”he said.
“Lotus has also announced that they will aggressively open more retail stores in China as well. And with Geely’s help and money, they are able to expand their product portfolio beyond just high-output sports cars to more profitable and popular segments, while also making it easier for their products to be sold, ”Tu added.
Similarly, Ferdinand Dudenhoeffer, a professor at the Center for Motor Research at the University of Duisburg-Essen in Germany, said he saw Geely’s new German engineering team in Raunheim bring exciting EVs to the roads, with a high chance of marketing success.
“Lotus has shown that it is an interesting company that is capable of creating automatic emotions, and it could very well become an insider’s darling who shows that Geely’s success with Volvo is repeatable,” said Dudenhoeffer.
A version of this article was first published by Nikkei Asia on November 29, 2021. © 2021 Nikkei Inc. All rights reserved