National carmaker Proton Holdings Bhd’s effort to steer Group Lotus plc to profitability may rev cost up to 480 million pounds (RM2.3 billion) by 2015 under its so-called five-year business turnaround plan. The projected capital spending would be financed via internally generated monies and “externally secured” funding which includes the recently-inked sponsorship agreement of a Formula One (F1) race team.Under the turnaround plan, the new Esprit will come out in 2013, followed by the new Elan in 2013, the new Elise in 2014, the new Elite in 2014 and the Eterne in 2015.Read the full news by Jeffri Mohd Rafiee from Bernama below.
GROUP LOTUS TURNAROUND PLAN ON TRACK
NORWICH, Jan 18 — Work to start production of Group Lotus’ new cars under the five-year turnaround plan is in progress.
Proton Holdings Group Managing Director Datuk Syed Zainal Abidin Syed Mohamed Tahir said the key to the turnaround plan, unveiled October last year together with the five new cars at the Paris Motor Show, was the fact that everybody was happy with the team that has been assembled.
Group Lotus is a wholly-owned subsidiary of Proton Holdings.
Syed Zainal Abidin said the turnaround plan would be a long journey as Group Lotus, though it has been giving better returns, has yet to become a profitable entity.
In any turnaround plan, there would be investments the group would have to put in first, he told reporters at the Group Lotus headquarters here on Monday.
“The five cars that you’ve seen at the Paris Motor Show are not going to come out tomorrow.
“For the time being, they have to live with the current cars they have, improve on their performance and the sales, and obviously on the engineering point-of-view.
“And I’m sure the plan is to turn around the company not only for one year but to be able to sustain it,” he said.
He said the total investment required for the five-year period was 480 million pounds (about RM2.3 billion), inclusive of product development, building facilities, branding and promotion.
Proton Holdings Chairman Datuk Seri Mohd Nadzmi Mohd Salleh said Group Lotus by itself could not raise that kind of money so it has to leverage on the holding company.
“The board members that we bring today will have a first-hand insight about the company and the programme being implemented, and this will give a lot of confidence to members when they have to approve certain things pertaining to Lotus,” he said, referring to the presence of several Proton Holdings directors at the Group Lotus test track located near the company’s assembly line.
Of investments required under the turnaround plan, Syed Zainal Abidin said the majority would be raised from commercial borrowings which, hopefully, could be finalised soon.
He said Group Lotus needed to sell about 3,500 cars, annually, to become profitable and the sales volume after the five-year period should be close to 8,000 units per annum.
This would mean the company’s contribution to Proton Holdings’ bottomline would be quite significant, he said.
First to hit the market, under the turnaround plan, will be the new Esprit in Spring 2013, followed by the new Elan in Autumn 2013, the new Elise in Spring 2014, the new Elite in Spring 2014 and the Eterne in Spring 2015.