The Transformation of Lotus

Eyebrows raised when Dany Bahar, former head of marketing at Ferrari, was tapped to take over for engineer Mike Kimberly as the head of Lotus. Then those eyebrows nearly hit the roof when Bahar told the media he's "not really a car guy."

Isn't Lotus a "car guy" kind of company? After all, it builds some of the purest driving machines out there. The Lotus Elise is barely more than a go-kart with doors. Is Bahar really the right guy for the job?

While Bahar may not consider himself a "car guy," he's certainly familiar with them. Before becoming a senior vice president at Ferrari, Bahar helped get Red Bull into motorsports. He may have an MBA rather than an engineering degree, but he's spent most of his professional life around cars. He even owns two Ferraris.

But does that qualify him to run a company like Lotus? He's learning quickly, with a little help from his friends. Since taking over at Lotus, he's brought in a heavy-hitting team of car guys to make sure Lotus gets it right. From Ferrari, he brought his right-hand man, Gino Rosato, to be director of corporate operations. With Rosato came Donato Coco, Ferrari's head of concept car design and former head of design at Citroen, and now Lotus' director of design. From Mercedes AMG, Behar pulled his new chief technical officer, Wolf Zimmermann, as well as his new chief operating officer, Stephan Pathenschneider. He then brought in his new director of operations, Michael Och, from Porsche. To top it all off, he brought in recently retired GM vice president, newly minted consultant, and prototypical car guy Bob Lutz. Bahar may not be a car guy, but he employs people who are.

While having the right people is a good start, the wrong management structure can stymie them. According to Bahar's subordinates, though, the management of Lotus is analogous to founder Colin Chapman's maxim "simplify, then add lightness." To win over people like Zimmermann and Coco, Bahar had to offer something beyond a paycheck, because they were probably making more money at their old jobs. What Bahar offered them was the freedom to design and engineer cars their way without reporting to boards and committees. Coco designs the car, Zimmermann engineers it, and Bahar signs off on it. It's almost as simple as that.

"I turned him down for the job twice," Zimmermann toldMotor Trend. "It wasn't until I read an interview with Dany in GQ on a plane that I decided to take him up on it because I liked what he had planned."

According to Zimmermann, life at AMG was becoming too stifling. AMG started out as an independent company, but it's been completely absorbed by Mercedes-Benz and slowly lost all autonomy. Bahar offered him the chance to create an all-new engine family and all-new cars, and Zimmermann took it.

"If the car is bad in two years, you can blame me personally," Zimmermann said.

It's a similar story for Coco. While he didn't feel the same pressure at Ferrari that Zimmermann did at AMG, he was limited in how far he could push the envelope of Ferrari design. It's no secret how tightly Ferrari regulates its image, from the looks of each car to the way it's perceived by customers. The Lotus job offered Coco the chance to stretch his design muscles a bit, and the result is an obvious deviation from the years when Mike Kimberley was at the helm.

While many people were surprised and confused by the new, angular styling language of the six concepts that debuted at the 2010 Paris Motor Show, the vehicles are not as foreign as they appear at first glance. To Coco's eye, Lotus' old "smiley" styling language was just that: old. He traces the Elise's upturned grille back to the original Elan of the 1960s, and contends that the Evora really didn't add much to Lotus design. That's not to say the edgy new designs seen in Paris have no precedent. Coco points to the iconic Lotus Seven and the famous Lotus 49 Formula 1 car, particularly their angular grilles, as inspiration. And after all, the Esprit had about as many curves as a Kansas highway.

After spending a year putting together the team, Bahar and crew got down to business. The plan to do several concept cars simultaneously began in December 2009 with the goal of revealing the group at the October 2010 Paris Motor Show. The original plan called for four cars. The City Car was developed separately by Lotus Engineering to show off their work in alternative propulsion, and the four-door Eterne luxury sports car was just a sketch. It wasn't until Bahar and Lutz stumbled upon that sketch just two months before the Paris show that the Eterne Concept was green-lighted. It was rolled onto the stage just 15 minutes before the show opened, and ended up being the star of the Lotus stand.

At the show, Bahar announced that not only would five of the six Lotus concepts on display go into production (the City Car was later approved for production), but they would be powered by Toyota engines, specifically the Lexus IS F's 416-horsepower 5.0-liter V-8. Less than a month later, that plan was scrapped and Zimmermann was given the go-ahead to design an all-new 4.8-liter V-8 engine.

What happened? Bahar says potential customers balked at the idea of paying $200,000 for a car with a Toyota engine. (Zimmermann says there's no way the Lexus engine would've fit under the hoods of Coco's concepts. Lexus, for its part, says it doesn't share technology.) Regardless, Zimmermann says the first prototype engine will fire on August 18 and is on track to debut beneath the hood of the new Esprit when it goes on sale in mid-2012 as a 2013 model. And that's just the beginning. A 3.6-liter V-6, essentially the 4.8-liter V-8 minus two cylinders, is planned for the Evora-replacing Elan. Before that, though, the V-8 may be sawed in half to create a new 2.0-liter turbo four-cylinder to power the next Elise and Exige. At the same time, his team is working on a new rear-wheel-drive transmission that will incorporate electric motors and a kinetic energy retrieval system. Then, they'll need to adapt it to a new front-wheel-drive transmission for their transverse engine cars. And they might work on an all-wheel-drive system for the Eterne similar to the Ferrari FF's dual-transmission solution.

Jump-starting a car company -- and there's no one at Lotus who doesn't believe the company needed a jump-start -- takes more than just shiny new designs and a fancy new engine. If Lotus is going to convince its loyal customers that these new cars deserve green and yellow badges, they need to have the sports car soul the company's long been known for. And Bahar knows that.

For him, the soul of Lotus is the "authentic driving experience." That means that future vehicles won't have complicated computer programs interfering with the handling and performance of the car. While that may work for cars like the Nissan GT-R, Bahar says it just isn't the Lotus way. Sports cars, he says, must have character and emotion, and you can't get that from a computer.

"It's not about making a 'perfect' sports car," Bahar said. "We don't necessarily want a 'perfect' car; we want one that's more authentic. Absolute numbers are not a priority for us."

That's not to say that Bahar wants to put out faulty cars. He and his team understand that Lotus cars don't have the best reputation for quality, and he's ready to do what's needed to correct that. The first step is in healing the Evora.

"We will work on quality improvements," Bahar said. "Evora is a fantastic car, but it has some defects we're addressing. By next year, there will be 130 defects we've corrected. Evora is the car that makes us survive the next several years."

To keep Lotus alive and prosperous, it will take more than incremental improvements in quality. Though Lotus has built its reputation on small, track-ready sports cars, it's a very small niche. To grow the brand, Lotus will have to grow the lineup and grow the cars. The purists are not pleased.

The first sacred cow on the sacrificial altar is the automatic transmission. This November, the first automatic-equipped Lotus since the '82 Eclat will reach our shores when the Evora IPS goes on sale with a Toyota-derived six-speed auto (the later automatic Excel SA was never imported to the U.S. ). For Bahar, it wasn't a hard decision. In the U.S. alone, Lotus estimates it's turning away half of all potential Evora buyers by not offering an automatic. Asian and Middle Eastern markets, too, prefer automatics to manuals.

Automatics "will complement manuals in the future," Bahar said. He says Lotus will be one of the few sports car makers going forward to continue offering manuals, as competitors such as Ferrari and Lamborghini swear them off.

Following the automatic transmission will be larger, heavier cars. Breathe, Lotus purists. Not all is lost. Gains in size and weight will be offset by more powerful engines. The future Elise, for example, will have a significantly better power-to-weight ratio thanks to a much more powerful engine that will offset a few hundred pounds of weight gain. Even at 2300 pounds, it will still be one of the lightest sports cars on the road. Its closest competitor in terms of price and performance, the Porsche Boxster Spyder, weighs 2940 pounds.

But doesn't this fly in the face of Chapman's famous credo "simplify, then add lightness?" At face value, yes, but Bahar says it's not that simple. There are some things that simply can't be avoided, such as government regulations that mandate dual-stage airbags and pedestrian impact protection. But beyond that, Bahar argues, Lotus is not bound by an edict to build cars as light as absolutely possible.

To make his case, Bahar has been hitting the books, researching the various works of Chapman. Lotus, Bahar says, had a different life before the Elise. "The Elise is not Lotus," he said, "Lotus is more than that." According to his readings of Lotus history, Chapman never wanted to be a "cheap" car manufacturer -- he wanted to be a legitimate Ferrari competitor. Chapman, Bahar points out, had different cars of all different sizes in his lineup, from the iconic Elan to the four-seat, automatic transmission Eclat. To Chapman, "lightweight" meant lighter than the competition, not necessarily as light as possible. Bahar points to the Esprit V-8 as an example. It weighed in at 3300 pounds, relatively portly by Lotus standards.

"I've read thousands of papers and documents from Colin Chapman -- not in a single one does he mention that a Lotus must weigh less than 1000 kgs (2200 pounds)," Bahar argued in a speech at the 2010 Paris Motor Show. "But what he does say is that a Lotus always has to be lighter than our competitors. And that's what I can promise: A Lotus will always be lighter, cheaper, and will have less CO2 emissions than our competitors, but to be competitive now, we have to do things differently."

"We want to be like the competition, but 200 kg (441 pounds) lighter," Bahar toldMotor Trend.

On that basis, Bahar will greatly expand the Lotus lineup over the next six years, beginning with expanding the Evora "family" to include an open-top variant and a stripped-down "extreme" variant. Next comes the resurrected Esprit and its variants, followed by the Ethos city car, then the Elite, Lotus' first front-engine and full-convertible car since the M100 Elan of the early '90s. After that will come the new Elise and a much more raw Exige variant, the four-door Eterne grand tourer, and the Evora-replacing Elan. Each car will have at least one variant if not several, and will offer both manual and automatic transmissions to appeal to as many customers as possible. Each car, Bahar says, must stand on its own merits. There will be no Ferrari-like mandate that each car absolutely "must be better than the last" in terms of outright performance.

Lotus will also be taking the new cars up-market with a few more creature comforts and better all-around quality. The next Elise, for example, will start at about the same price as the current range-topping Elise SC. The new Esprit is expected to come in at $170,000 while the Elite lands around $180,000, and the Eterne likely a bit more than that. The Elan will be more expensive than the current Evora, though Lotus hasn't decided how much more yet.

Not all new Lotus cars will be more expensive, though. Enter the Ethos, the production version of the City Car Concept. It's a boxy, four-seat city car powered either by pure battery power or a combination of battery power and an onboard range-extending generator like the Chevrolet Volt, and it'll be priced at around $50,000. How does it fit into the Lotus ethos? The same way the Cygnet fits into Aston Martin's. Producing the Ethos will offset Lotus' fleet fuel efficiency and emissions, allowing the company to continue building Esprits and still meet government mandates. Bahar promises, though, that it will still be a real Lotus, in that it will be the best-handling city car on the market. You can tell he's serious about it, because he openly declares that it's his favorite car of the new lineup. "It's the only aggressive-looking city car there is," he says.

Promises are wonderful, but only if they're kept. Lotus, perennially a small outfit producing cars in small volumes, isn't the first company one would expect to roll out six all-new cars in six years. Bahar's got a plan to pay for it all, and he says it's already a done deal. The company has already raised the 508 million pounds ($814 million) it says it will need to pay for the entire run of new cars, 300 million pounds ($481 million) of which came in the form of private loans. Of that sum, 70 to 75 percent will be spent on developing the product. Five percent will go towards upgrading Lotus' facilities in Hethel and the rest will go towards other expenditures.

The plan, for the moment, is to build all of the mid-engine cars at the Hethel factory following an expansion of the lines. The front-mid engine Elite and Eterne will be produced by either Finland's Valmut or Austria's Magna Styer and shipped directly to customers from the factory. Magna seems the more likely candidate, as a perfectly sized hole is about to open in its production schedule when Aston Martin moves production of the under-performing Rapide back to England. Lotus also considered building its largest cars in Britain, but only after the local government in Norwich offered up a loan designed to stimulate local development. Lotus' first application was rejected, so the company resubmitted an application for a smaller loan that is still pending approval. Moving production to England could potentially create 800 jobs.

"We have a social responsibility, being in England, to bring jobs here," Bahar said.

The final piece of the puzzle may well be the easiest, and it's Bahar's specialty: marketing. For any of the new models -- and thus the whole recovery plan -- to succeed, they need to sell, and to do that they need exposure. Work has already begun building the lifestyle side of the Lotus brand, reaching out to current and future customers with a glossy new magazine titled simply "Lotus" that features fashion, artwork, and tales of racing heroism related to Lotus. The first issue featured a story on Ayrton Senna, naturally. At the same time, the company has launched a line of apparel, trinkets, and mementos similar to products from Ferrari, Porsche, Bentley, etc. To reach the enthusiasts in its ranks, Lotus has also launched the Lotus Driving Academy at its just-remodeled factory test track and has already expanded it to a second location in Budapest at the Hungaroring. In the near future, a third academy will open at the Yas Marina Circuit in Abu Dhabi, then a fourth at an undecided track in Japan, and a fifth in the U.S. Lotus says it's considering tracks on the U.S. coasts including Limerock, Laguna Seca, and Sears Point, but hasn't made a final decision.

The plan, then, is bold. The direction is new, and it's likely to rankle diehard Lotus fans who subscribe wholeheartedly to the Chapman doctrine. If it works, it will re-launch a storied brand into the hallowed territory of Ferraris and Aston Martins. If it doesn't, this may well be Lotus' swan song. The money is in, the cars are set, and the team is ready to make history. All that's left is to see if the market shares Bahar's vision for the future of Lotus.