Volvo Owners to Inject $1.9 billion into Making Lotus Great Again

Right after Geely announced buying its controlling stake into Lotus Cars on May, 2017, Torque News speculated on the synergies merger can bring to the new investor. Geely sounded committed too: “Reflecting our experience accumulated through Volvo Car’s revitalization, we also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies” Mr. Daniel Donghui Li, Executive Vice President and Chief Financial Officer of Geely Holding Group was quoted in Geely press release.

A year has passed when on June, 2018, Mr. Feng Qingfeng, vice president and chief technical officer of Geely has been appointed to succeed long term Group Lotus CEO Mr. Jean-Marc Gales. Now Geely announces to Bloomberg on its ‘at least’ $1.9 billion investment into reviving Lotus brand.

Investment in stages

Apparently Geely’s strategy chosen for Lotus is to grow niche sports car maker into volume manufacturer towards luxury end of the market. If there was one name to come up with when speaking about sports car market, volumes and luxury, it’s the brand by which whole market segment is defined and it’s Porsche. Task is big, but so is Geely and its automotive ambitions.

Geely plans to invest to expansion of Lotus production facility in the U.K. and engineering workforce. Among future plans is construction of the second factory and design center. Currently no official confirmation on production of Lotus cars in China.

Lotus has previously disclosed their plans on offering Lotus cars for China market, U.S. sales expansion and a introducing new models to the market, among which should see a SUV in the nearest future. Our guessing would be Lotus-branded, perhaps Volvo platform based one, as this would seem to be a logical milestone in the volumes department of the growth strategy.

Lotus Growth will be multi-digital

Currently in U.S. Lotus offers two models - Porsche 911 rivaling Lotus Evora and hardcore track-focused open two-seater Lotus 3-Eleven. In Europe Lotus also sells their smaller platform based Elise and Exige models.

To understand the scale of where Lotus currently stands, let’s look at some sales delivery numbers. Lotus long-stated goal is to sell 3,000 car a year, in 2017 they delivered 1,600 cars globally. Lotus admits that even crossing 10,000 cars a year mark is not possible without the SUV. To give some comparison, Porsche sold 21,400 of its 911 badged cars and this was during half a year period.

We will follow Geely’s journey into becoming an established world-wide automotive manufacturer closely. Geely already has a sound investment being made into forming and automotive investment portfolio with stakes not only at Lotus Cars and Volvo Car Group, but also at AB Volvo (trucks, buses, construction equipment, engines), Daimler AG (that’s 10% at Mercedes-Benz), Proton (Malaysian car manufacturer), London Taxi Company and Terrafugia (flying car company) to name the few. Synergy potential is there, globally focused management too, so we plan this journey to be news full.