Lotus defies Brexit with production jump under new Chinese owner

Lotus Cars is preparing for an expansion under Asian owner Geely Automobile Holdings Ltd. that could see the iconic British automaker open a second U.K. factory and target new markets by building higher-volume models in China.

Lotus plans to triple output at its base in Hethel, eastern England, to slightly more than 5,000 cars a year and could reach 10,000 if it adopts a double-shift work pattern, Chief Executive Officer Phil Popham said in an interview. Further increases might require a new plant elsewhere in the country, he said, adding that he’s unconcerned about the impact of Britain leaving the European Union.

Popham described Lotus as a “70-year-old startup” after the launch of its first new car in 10 years. The 1.7 million-pound (USD2.1 million) all-electric Evija will be followed by a solely combustion-engined model to be revealed in 2020, after which all subsequent cars will have electric variants, possibly skipping a hybrid option which the CEO said can add too much weight for a sports design.

Lotus’s 10-year growth plan includes an expansion into new segments, Popham said after unveiling the Evija at an event in London where it displayed past models including the 1960s-vintage Elan and the wedge-shaped Esprit, famously driven underwater by film spy James Bond. That could include anything from a sport-utility vehicle through a crossover model to a sedan. The company made 1,632 cars in 2018 and expects to top 1,700 this year.

Geely Chief Technical Officer Feng Qingfeng, also CEO of Group Lotus following a takeover by the Zhejiang-based automaker in 2017, told journalists that while Lotus’s core sports lineup would continue to be built in the U.K., higher-volume models could be made in China.

“The manufacturing location depends on the local advantage,” he said. “The U.K. is good at making hand-made cars, so sports and hypercars. In China we may have more advantage in infrastructure for mass-production cars.”

Popham said there’s scope for Lotus to work with other Geely companies, which include Sweden’s Volvo Cars and Proton of Malaysia, the U.K. brand’s former owner, though there’s no question of re-badging other platforms with the name, and neither would the same model be made in multiple locations.

Speaking on Bloomberg TV, the CEO said Lotus has secured the first few orders for the Evija in recent weeks and expects to sell the “halo” model, which will have a production run of just 130 cars, to buyers from around the world.

Despite the Evija’s hypercar credentials, which will see it vie with the Pininfarina SpA Battista and Rimac Automobili’s Concept One, as well as top-end conventional models from the likes of Ferrari NV and Lamborghini, Popham said future cars will remain within Lotus’s established 50,000 pounds to 150,000 pounds price bracket, though there’s some scope for moving upscale.

Even with the advance of automation, Lotus sees a long-term market in supplying cars “that people can have fun in,” the CEO said. New technologies will be used to assist the driver in getting the most out of the car, while intervening if they “overstep the mark,” he said.

Feng ruled out an early return to Formula 1 racing, where Lotus was once a dominant force, while saying he expects the company to do more in motor sport generally.

U.K. Business Secretary Greg Clark attended the Evija launch, and Popham said Lotus will benefit from government initiatives to encourage electric cars, though hasn’t received loan guarantees like those recently granted to Jaguar Land Rover after it announced a new range of electric cars.

Lotus has no major concerns about Brexit, Popham said, adding that a U.K. split from the European Union on Oct. 31 now seems likely given commitments from the candidates to succeed Theresa May as prime minister. The company has stockpiled parts in case of a no-deal exit, but the CEO said any impact would be limited and predicted that new trade accords would be rapidly concluded. MDT/Bloomberg