Lotus unveils plan to create 300 new jobs and design next generation of sportscars in Norfolk
PUBLISHED: 16:38 27 January 2018 | UPDATED: 14:41 01 February 2018
Iconic carmaker Lotus will create 300 new jobs as it plans to design and build the next generation of sportscars in Norfolk, we can today reveal.
The company has laid out its 10-year vision under the new ownership of Chinese car giant Geely, which includes increasing production more than five-fold, the design and launch of a new four-door SUV, and a commitment to Hethel, its home for more than half a century.
Chief executive Jean-Marc Gales said the company had emerged from the most important year in its history in 2017, during which it completed a return to profitability, and now stood ready “to build the future”.
The news comes as a bright spot in a bleak few months for Norfolk’s economy, with high-profile job losses at companies including Britvic, Colman’s and Kier in Norwich, BAE Systems at RAF Marham, and Multiyork in Thetford.
Mr Gales said: “Last year we announced the turnaround, and that’s now done. We’ve cracked the operational model and now need to build the future.
“At the right time, the right company has bought us – we couldn’t have chosen a better investor.”
The 750 staff at the Potash Lane site in Hethel were briefed on the plans earlier this week. Already 40 posts have been filled, with a target of 100 new recruits by the end of March and the remainder to be employed this year.
The two new sportscars – the names of which have not been confirmed – and the recruitment drive represented “a substantial investment” from Geely, said Mr Gales.
“Both cars will be benchmark sportscars in their respective segments, that show again what Lotus is famous for: its handling, light weight and aerodynamics.
“Everybody wants to do that nowadays – everybody wants to be strong in something we’ve been strong in since the beginning,” he said.
“We are going to build these two cars until 2024-25, so that gives stability to the 300 new families and to the people who are already here.”
Mr Gales said Lotus had been profitable in the calendar year 2017 and its unaudited figures showed revenue had broken the £100m mark, up from an unaudited £81.5m the year before.
The two sportscars will be developed over the next two years, with a hybrid-power crossover vehicle – described as lower, wider and lighter than a traditional SUV – being worked on ahead of a possible launch in 2021.
After selling 1,600 cars in the last calendar year, the two new models are expected to push Lotus’s annual sales back beyond 2,000 by 2021, but the four-door vehicle is being developed with the growing American and Chinese markets in mind.
With a proposed manufacturing base in China and another in Europe – its location is yet to be decided – there are hopes that the SUV could eventually take Lotus production beyond 10,000 vehicles a year.
“This will help us get into five-digit numbers for Lotus, so a real success story,” said Mr Gales.
“The biggest market in the world for this car is China by a large margin, so there will be one manufacturing site in China but there will also be one in Europe, preferably in the UK. That will transform the company into a multi-billion pound company. That’s the plan.”
A multi-million pound investment will also be made to modernise the production line, automating some of the heaviest tasks, while construction of a major building begun under previous owners will be completed. The cars would remain handmade, however, said Mr Gales.
Chinese automotive heavyweight Geely took a majority stake in Lotus in May 2017, vowing to “unleash the full potential” of the brand. It already owns Volvo and the former London Taxi Company, now the London Electric Vehicle Company.
“Geely is, as an investor, 100% behind us; Geely wants to support us and Geely will support us,” said Mr Gales. “There’s a 10-year plan, this is part of it and there are more new cars coming.”
The link-up with Geely was already allowing Lotus access to a wider range of technology and systems, updating some components “to the technology of the 2020s”, said Mr Gales.
“We can access the expertise of 60,000 people around the world,” he said. “They have bought Lotus because they want us to develop into something much bigger.”
Group Lotus is a member of the EDP/EADT Top 100, a directory of Norfolk and Suffolk’s biggest companies by turnover.
• Geely - a rising force?
Lotus’s owner since May last year is one of the rising stars in the rapidly-changing automotive market, making more than 2.5 million vehicles a year.
Zhejiang Geely Holding Group – or Geely – is a Chinese manufacturer which has expanded rapidly through acquisition in recent years.
In 2010 it bought Volvo, where it has overseen a dramatic turnaround, and in 2013 bought the London Electric Vehicle Company.
China’s manufacturers, mindful of the country’s pollution problems, are making great strides in developing electric and hybrid vehicles. Lotus’s own previous work in this field is likely to have appealed to Geely, while the Hethel manufacturer will benefit from a foothold in the growing Asian market.
“High-end sportscars will need some form of electrification,” said Mr Gales. There will be combustion engines in them for the next 10 years, but it will switch at some point. We need to be prepared and we will be prepared.”
He added: “We have it in our plans because sportscars will transition to electric, and they will do so quickly than some sportscar makers believe.”
• A long time coming?
For those who feel an affection for the famous Lotus marque, the good news may have felt like it was a long time coming.
When Jean-Marc Gales arrived at the helm four years ago, he faced the challenge of turning the business around.
In 2014, company losses totalled £167.8m and a cost-cutting drive led to the loss of 300 jobs – a move Mr Gales has said “saved 800” who remained. Since then, the company has endured a “long, tough road” by focused on efficiency, lowering its costs and increasing the profit margins on its cars.
Last year the company regained a positive cashflow – in short, earning more than it was spending – and encouraging noises began to emerge of future expansion.
A takeover by Geely in May gave Lotus the support of a global automotive player, with strong links in the growing market Asian market, which Lotus now intends to tap into.