Lotus surprised attendees at the Paris show today by unveiling not one, but five new models, rather overshadowing the Lotus Evora S and Evora Auto which also made their debut at the show. Four out of the five cars are completely new models (Elite, Elan, Esprit and Eterne) whilst Lotus also displayed a redesigned Elise, due to reach production in 2015. By then the Lotus Brand will be unrecognisable from today, with prices substantially higher and very different customer profile.

Lotus also unveiled a new Compact City Car with a plug-in electric drivetrain backed up by a 1.2-litre range-extending petrol engine. It will do 35 miles on its electric power source, extending up to 200 miles once the petrol engine comes into use. This is due to reach the market in 2014.

Lotus MD Dany Bahar, who has been in his role for just over a year, explained to the BBC this morning that “This is not just about the cars, it’s about the complete remake of the brand,” he went on to add that he expects sales volumes to double from about 3,000 today to between 6,000 and 8,000 cars per year, and with prices of the Esprit starting at £110,000+ and the Elan – £75,000+, this represents a significant shift for the brand from its typical £30,000 – £40,000 price bracket and could result in a tripling of revenue for Lotus if all goes to plan.

From the news today it is as yet unclear what this means for the current Evora, Europa and Exige models but clearly the downside of today’s announcement is the intention signalled by Lotus to move away from its current customers, winning conquest sales from Porsche, Aston Martin and Ferrari.

[blockquote type=”blockquote_quotes” align=”right”]This is not just about the cars, it’s about the complete remake of the brand.[/blockquote]

The new Elan is positioned above the relaunched Elise (and we assume the Evora, if that still has a place in the range), which My Bahar describes as likely to “keep our current customers happy”. Hmm, I wonder if he really understands the typical Lotus customer?

Another consequence of this new model strategy is the impact it is likely to have on the current network of Lotus franchised dealers – most will be ill-equipped to provide the type of service expected by a customer spending £100,000+ and will surely be unable to make the necessary investment to upgrade their premises. So, we’re likely to see a wholesale culling of Lotus dealers in the near future, and as many (current) Lotus owners will attest, the dealer relationship is often part of the ownership experience they currently enjoy.

This could well be the biggest gamble in Lotus’ history – it has survived through the past decade due to the loyalty and support of Elise and Exige buyers (many of whom buy several cars) and it’s these customers who are most likely to feel left in the cold by Lotus’ new strategy. We wonder if they’ve truly thought this through.

And whilst we are expressing our reservations about Lotus’ new strategy, was it really wise to launch 5 cars on the same day? Communication is a two way process and as any marketer knows you cannot force-feed the market, especially with such a radical change. There’s a lot to take in (all at once) and perhaps we all need a little time to digest these changes and then review each car on its own merits.

For the record, our initial reaction is that the Elan looks promising although expensive, the Esprit should be stunning to drive although why is it 100kg heavier than a Gallardo? The new Elise looks set to polarise opinions and we expect few current Elise owners to greet it warmly. We saw the Elite a few weeks ago but it’s the 4-seat Eterne that looks like being the most desirable, especially when compared to Porsche’s Panamera and Aston’s Rapide.

How weird is that to find a sports-saloon to be the highlight of the new Lotus range? But then it’s been a weird day for Lotus.

Written By

Steve Davies

Steve is an investor, private equity advisor and former Partner at KPMG, PwC and Bain.   Most importantly he's a life-long car enthusiast, mountain biker and active sports enthusiast. He designs and builds technology platforms and is the architect behind Transmission.

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